Monthly Salary (Basic + DA) is your last drawn basic salary plus dearness allowance, crucial for gratuity calculation.
₹ 4,36,06,469
A Gratuity Calculator is a financial tool that helps employees estimate the amount of gratuity they are entitled to receive upon leaving their job after completing a minimum of five years of continuous service. Gratuity is a lump-sum payment made by employers as a token of appreciation for the employee's long-term service. The calculator takes into account key factors such as the employee's last drawn salary, the number of years worked, and whether the employer falls under the Payment of Gratuity Act, 1972. By inputting these details, the Gratuity Calculator quickly provides an estimate, allowing employees to plan their finances better and understand the benefits they can expect upon retirement or resignation.
Employees with longer tenure and higher basic salaries are eligible for higher gratuity amounts. The gratuity is calculated based on the employee's last working day. A Gratuity Calculator works through the following steps:
The formula used by a Gratuity Calculator under the Gratuity Act is: Gratuity= n*b*15/26, where n denotes the tenure of service an employee has completed, and b denotes the last drawn salary plus dearness allowance.
Provides a precise calculation of gratuity based on salary and tenure.
Quickly computes the gratuity amount, saving time and effort.
Assists in better financial planning for retirement or job change.
Offers clarity on the gratuity amount an employee is entitled to.
Easy to use, requiring only basic input details for calculations.
Using a Gratuity Calculator is simple and efficient. Start by entering the last drawn salary, which includes the basic salary and dearness allowance. Next, input the total number of years of service with the current employer. After that, indicate whether your employer falls under the Payment of Gratuity Act, 1972. Once these details are entered:
Suppose an employee has a last drawn basic salary plus dearness allowance of ₹30,000 and has completed 10 years of service with an organization covered under the Gratuity Act. Using the Gratuity Calculator, the estimated gratuity amount would be ₹1,73,077. This calculation helps the employee understand the benefits they will receive, allowing for better financial planning as they approach retirement.
1. Easy to Use: User-friendly interface for quick and easy calculations.
2. Instant Results: Provides immediate estimates of the gratuity amount.
3. Customizable Inputs: Allows for adjustments to salary, tenure, and employer type.
4. Accurate Forecasting: Delivers reliable results for better financial planning.
5. Secure Platform: Trusted and safe for all your financial calculations and data privacy needs.
Retirement gratuity calculation in India depends on whether the employer is covered under the Payment of Gratuity Act, 1972. Generally, it's calculated based on your last drawn basic salary plus dearness allowance, multiplied by 15/26 (for covered employers) or 15/30 (for non-covered employers), and then by your years of service. A minimum of 5 years of continuous service is usually required.
Gratuity is a lump-sum payment given by an employer to an employee as a token of appreciation for their services, typically upon leaving the company. In India, it's governed by the Payment of Gratuity Act, 1972, and usually requires a minimum of five years of continuous service. It's a significant retirement or exit benefit.
Yes, gratuity calculation primarily uses your last drawn basic salary, but it also includes your Dearness Allowance (DA). Other allowances like HRA or conveyance are generally excluded. This combined figure (basic + DA) is crucial for determining the final gratuity amount based on your years of service.
Yes, there's an upper limit for gratuity. For private sector employees covered under the Payment of Gratuity Act, 1972, the maximum tax-exempt gratuity amount is INR 20 lakhs. For central government employees, this limit has been increased to INR 25 lakhs. There's no specific lower limit on the calculated amount, but eligibility usually requires 5 years of continuous service.
In gratuity calculation for employees covered by the Payment of Gratuity Act, 1972, 15/26 signifies: 15 days' salary for each completed year of service, divided by 26, which represents the assumed number of working days in a month (excluding weekly offs). This ensures the gratuity reflects actual working days.
