Gratuity Calculator
Your Gratuity Amount:
₹0.00
What is Gratuity?
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, in India.
Gratuity Formula
The formula to calculate gratuity is:
Gratuity = (Last Drawn Salary × Years of Service × 15) / 26
Purpose of Gratuity
- Rewards employees for long-term service.
- Provides financial security post-retirement or resignation.
- Encourages employee loyalty and retention.
FAQs about Gratuity Calculator
- What is a Gratuity Calculator? A tool to estimate gratuity amount based on salary and years of service.
- How does the Gratuity Calculator work? It uses the gratuity formula to compute the amount.
- Who is eligible for gratuity? Employees with 5+ years of continuous service.
- Is gratuity taxable? Yes, but it is tax-exempt up to ₹20 lakhs in India.
- Can I use the Gratuity Calculator for part-time work? No, it is designed for full-time employees.
- What is the maximum gratuity limit? The maximum limit is ₹20 lakhs as per the Gratuity Act.
- Does the Gratuity Calculator include bonuses? No, it only considers basic salary and DA.
- Is gratuity paid for voluntary resignation? Yes, if the employee has completed 5 years of service.
- Can I use the Gratuity Calculator for government jobs? Yes, but the formula may differ slightly.
- Why should I use a Gratuity Calculator? To plan your finances and understand your entitlements.