Gratuity Calculator
Calculate your gratuity amount based on your last drawn salary and years of service.
Service Details
Calculation Logic
Formula: (15 * Salary * Years) / 26
Rounding: Service of more than 6 months is rounded to the next full year.
Quick Insights
- Gratuity is a benefit given by employers to employees.
- Usually payable after 5 years of continuous service.
- Calculation is based on 15 days of salary for every year.
- The maximum tax-free gratuity limit is ₹20 Lakhs.
Understanding Gratuity Calculations
Gratuity is a lump sum amount that an employer pays to an employee as a token of appreciation for the services rendered to the company. It is usually paid at the time of retirement, resignation, or termination.
In India, the Payment of Gratuity Act, 1972, governs the payment of gratuity. It is applicable to employees who have completed at least five years of continuous service with the same employer.
The formula for calculating gratuity is (15 * Last Drawn Salary * Years of Service) / 26. The last drawn salary includes Basic salary and Dearness Allowance (DA).