Gratuity Calculator

Gratuity is a monetary benefit paid by employers to employees as a token of appreciation for their services. It's payable upon retirement, resignation, death, or disablement after completing a minimum of 5 years of continuous service.

Our calculator helps you determine the exact gratuity amount based on your last drawn salary and years of service, considering different organization types and tax implications.

Gratuity Calculation Formula:

For organizations covered under Gratuity Act:

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

For organizations not covered under Gratuity Act:

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

Eligibility Criteria:

• Service Period: Minimum 5 years of continuous service
• Organization Size: 10 or more employees (for Gratuity Act coverage)
• Salary Basis: Last drawn basic salary + dearness allowance
• Maximum Limit: ₹20 lakh (as per current rules)

When is Gratuity Payable:

• Retirement: Upon reaching retirement age
• Resignation: After completing 5 years of service
• Death: To nominee/legal heir (no minimum service period)
• Disablement: Due to accident or disease

Tax Implications:

• Tax-Free Limit: Up to ₹20 lakh is completely tax-free
• Excess Amount: Amount above ₹20 lakh is taxable
• Section 10(10): Provides tax exemption for gratuity
• Form 16: Employer provides tax details

Important Notes:

• Gratuity is calculated on basic salary, not gross salary
• Fractional years above 6 months are rounded up
• Different formulas for covered vs non-covered organizations
• Nomination facility is available
• Employer must pay within 30 days

Features:

• Calculate gratuity for different organization types
• Tax-free vs taxable amount breakdown
• Yearly gratuity accumulation tracking
• Visual gratuity growth over service years
• Comprehensive gratuity rules and guidelines