Gratuity Calculator: Know Your Retirement Benefits Instantly

Ever wondered how much gratuity you’ll receive when you retire or leave a job? If you’ve worked for five years or more in an organization, you’re entitled to gratuity under India’s Payment of Gratuity Act, 1972. But calculating the exact amount can be tricky. That’s where a Gratuity Calculator helps!

This tool gives you an instant estimate of your gratuity amount based on your salary and years of service. No complex math—just enter your details and get the results!

How is Gratuity Calculated?

The gratuity formula depends on whether your employer is covered under the Gratuity Act or not.

1️⃣ For Employees Under the Gratuity Act

If your company is covered under the Gratuity Act, the formula is:

Gratuity = (15 × Last Drawn Salary × Years of Service) / 26

✔ Last Drawn Salary = Basic Salary + Dearness Allowance (DA)
✔ Years of Service = Number of completed years (if you worked 6 years, 7 months → count as 7 years)
✔ 26 = Fixed number of working days in a month

2️⃣ For Employees NOT Under the Gratuity Act

If the employer is not covered under the Gratuity Act, the formula changes slightly:

Gratuity = (15 × Last Drawn Salary × Years of Service) / 30

Here, 30 is used instead of 26, which means the gratuity amount will be slightly lower.

Example: See It in Action

Let’s say your last drawn salary (Basic + DA) is ₹50,000 and you’ve worked for 12 years in a company covered under the Gratuity Act.

Gratuity = (15 × 50,000 × 12) / 26 = ₹3,46,153

So, when you leave, you’ll receive ₹3,46,153 as gratuity. If the company is not covered under the Act, the amount will be slightly less.

Who is Eligible for Gratuity?

✔ Minimum 5 years of continuous service in a company
✔ Retirement, resignation, or job change
✔ In case of death or disability, gratuity is paid even before 5 years

Why Use a Gratuity Calculator?

✔ Instant Results: No manual calculations required
✔ Accurate Estimates: Helps in financial planning
✔ Compare Different Scenarios: Adjust years of service & salary to see changes
✔ Retirement Planning: Know how much you’ll get when you leave

Final Thoughts

Gratuity is your right and a valuable financial benefit after years of hard work. Instead of guessing how much you’ll get, use a Gratuity Calculator and plan ahead!

Start early, plan wisely, and secure your financial future. 💰🔥

FAQs

Gratuity is a lump sum payment made by an employer to an employee as a token of appreciation for their long-term service. It is governed by the Payment of Gratuity Act, 1972, and is applicable to employees who have completed at least 5 years of continuous service.

The Gratuity Calculator estimates the gratuity amount based on the following inputs:

Last Drawn Salary: The sum of your basic salary and dearness allowance.
Years of Service: The total number of years you have worked for the employer.

It uses the formula:
Gratuity = (Last Drawn Salary × Years of Service × 15) / 26

You need to provide:

Last Drawn Salary: Your basic salary plus dearness allowance.
Years of Service: The total number of years you have worked for the employer.

Employees are eligible for gratuity if they:

Have completed at least 5 years of continuous service with the same employer.
Are retiring, resigning, or leaving the job after meeting the eligibility criteria.
In case of death or disability, the 5-year rule is waived.

Gratuity is partially taxable. For government employees, it is fully exempt from tax. For private sector employees, the least of the following is tax-free:

₹20 lakh (as per the latest limit).
Actual gratuity received.
Eligible gratuity as per the formula.

Generally, gratuity is payable only after completing 5 years of continuous service. However, in case of death or disability, the 5-year rule is waived, and the gratuity is paid to the nominee or legal heir.

The maximum gratuity amount payable is ₹20 lakh (as per the latest limit). Any amount above this is taxable.

No, the Gratuity Act applies only to full-time employees who have completed at least 5 years of continuous service. Part-time employees are not eligible for gratuity under this Act.