Gratuity Calculator
Calculate your gratuity amount based on your last drawn salary and years of service with the employer. Gratuity is a retirement benefit paid by employers in India.
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Gratuity Amount
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What is gratuity?
Gratuity is a lump sum amount paid by employers to employees upon retirement or separation after completing minimum service period. It's a form of reward for loyalty and long-term service.
What is the minimum service period for gratuity?
Under Payment of Gratuity Act, 1972, employees must have at least 5 years of continuous service to be eligible for gratuity. Service less than 5 years is not eligible unless employment ended due to death/disability.
How is gratuity calculated?
Gratuity = (Last drawn monthly salary × 15 × Years of service) / 26. The 15 and 26 are fixed factors prescribed by law. It's based on basic salary plus dearness allowance.
Is gratuity taxable?
Gratuity is tax-free up to ₹20 lakh. Amount exceeding ₹20 lakh is taxable. Also, if gratuity is received before completion of service tenure, different provisions may apply.
Who is covered under the Gratuity Act?
Gratuity Act covers all organizations with 10+ employees. Small organizations may follow specific rules. Government employees have separate gratuity provisions. Check applicable rules for your organization.
Can I receive gratuity if I resign?
Yes, if you have completed 5 years of service. Gratuity is payable on resignation, retirement, or superannuation. For involuntary separation due to employer action, eligibility may be more liberal.