Gratuity Calculator

Calculate your gratuity amount based on salary, years of service, and employment terms. Free online gratuity calculator for employees.

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Gratuity Calculator

Calculate your gratuity amount based on your basic salary, years of service, and employment terms. Understand your retirement benefits and long-term service rewards.

Gratuity Calculator

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Enter your employment details above to see your gratuity calculation.

Understanding Gratuity

What is Gratuity?

A statutory benefit paid by employers to employees as a reward for long-term service, typically after 5 years of continuous employment.

Eligibility

Employees who complete 5 years of continuous service with the same employer are eligible for gratuity payment.

Calculation Formula

Gratuity = (Basic Salary + DA) × Years of Service × 15 ÷ 26, with maximum limits applied.

Tax Treatment

Gratuity is tax-free up to certain limits, with the exemption amount varying based on employment type and circumstances.

Gratuity Guidelines

Calculation Rules

Formula: (Basic + DA) × Years × 15 ÷ 26
Maximum Years: 20 years
Maximum Amount: ₹20 lakhs
Minimum Service: 5 years

Payment Conditions

Retirement: Full gratuity
Resignation: After 5 years
Death: Full gratuity
Disablement: Full gratuity

Tax Implications

Tax Exemption Limits

  • Government employees: Fully tax-exempt
  • Private sector: ₹20 lakhs maximum exemption
  • Death/disablement: Fully tax-exempt
  • Excess amount: Taxable as salary income

Important Considerations

  • Gratuity is separate from PF and pension
  • Not applicable to contract workers
  • Can be claimed by nominees in case of death
  • Employer must pay within 30 days
  • Disputes can be referred to labor authorities

Features

  • • Accurate gratuity calculation
  • • Multiple employment types
  • • Tax exemption estimates
  • • Service period calculation
  • • Different exit scenarios
  • • Free to use

Perfect For

  • • Employee retirement planning
  • • HR professionals
  • • Financial advisors
  • • Salary negotiations
  • • Tax planning
  • • Employment benefits

Important Disclaimer

This calculator provides general estimates for educational purposes only and should not replace professional financial or legal advice. Gratuity calculations may vary based on specific employment contracts, company policies, and applicable laws. Always consult with your HR department, financial advisor, or legal professional for accurate calculations and guidance specific to your employment situation.

Frequently Asked Questions

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's typically calculated based on the employee's basic salary and years of service.

How is gratuity calculated?

Gratuity is usually calculated as: (Basic Salary × Years of Service × 15) ÷ 26. The maximum gratuity amount is often capped at 20 times the basic salary, and the maximum years of service considered is typically 20 years.

When is gratuity paid?

Gratuity is paid when an employee completes 5 years of continuous service with the same employer, or upon retirement, resignation, death, or disablement due to accident or disease.