Gratuity Calculator: Calculate Your Gratuity in Seconds

This tool calculates gratuity based on your basic salary and years of service. Enter your details and click “Calculate” to view the gratuity amount.

Gratuity Calculator

Gratuity Calculator



Gratuity Amount:

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Disclaimer for Calculator: The above calculator is for illustrative purposes and not actual. The calculator does not take into consideration the applicable scheme expenses.

How to Calculate Gratuity: Step-by-Step Guide Calculation Formula

The gratuity formula to calculate this for employees covered by the Payment of Gratuity Act, 1972 in India is:

gratuity calculator
gratuity formula

Eligibility Criteria for Gratuity:

  • Basic Salary stands as a basic pay and dearness allowance(DA) (if any).
  • Number of years of service is rounded down to the nearest full year. For example, 7 years 6 months would be considered as 7 years.
  • 15 is the number of days for gratuity, as per the Payment of Gratuity Act, 1972.
  • 26 is the number of working days in a month (for gratuity purposes).
If you want to withdraw gratuity by manually, so you need to fill manual FORM 'l' APPLICATION

Gratuity Example Calculation:

Let’s consider an example:

  • Basic salary: ₹30,000 per month
  • Years of service: 8 years
  • The employee is covered under the Payment of Gratuity Act.

Now, applying the formula:

Gratuity Calculation Formula example
Gratuity Calculation Formula with example

So, the employee would be eligible for a gratuity of ₹138,461.

For official information on the Payment of Gratuity Act, 1972, visit the Ministry of Labor and Employment’s website Payment of Gratuity Act, 1972

Important Notes on Gratuity Eligibility:

  1. Eligibility: Gratuity is only payable after completing 5 years of continuous service with the employer.
  2. For employees not covered under the act, gratuity is calculated differently, but most employers follow this method for consistency.

Official Sources:

Disclaimer: Official Information on Gratuity This content is for informational purposes only. For official updates, refer to the Ministry of Labor and Employment website.
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Disclaimer: epfoservices.org is a private, non-governmental website providing educational content on government schemes. While we strive to present accurate information, please note that the details may change over time. For official, up-to-date information, kindly visit the respective government websites. We are not affiliated with any government body, and the content shared here is for informational purposes only.

FAQs About Gratuity

What happens if I leave before 5 years?

If you resign from your job before completing 5 years of continuous service, you are not eligible for gratuity under the Payment of Gratuity Act, 1972. However, some employers may offer ex-gratia payments or voluntary gratuity schemes at their discretion. We advise to check your company’s policy regarding gratuity for employees who leave before the minimum tenure.

How is gratuity taxed?

Gratuity is subject to taxation based on few conditions. Under the Income Tax Act, gratuity received by an employee is exempt from tax up to a certain limit:

For employees covered under the Payment of Gratuity Act, The least of the following is exempt from tax:

1. The amount of gratuity received.
2. ₹20,00,000 (as of current regulations).
3. 15 days’ salary for each completed year of service.

For employees not covered by the act, the exemption limit is calculated differently. It’s essential to consult a tax professional or refer to the latest tax regulations for detailed guidance on taxation.

Can gratuity be claimed if I resign?

Yes, you can claim gratuity if you resign after completing five years of continuous service.

How is gratuity calculated for employees who are terminated?

Gratuity calculation for employees who are terminated follows the same formula as for those who resign, provided they have completed five years of continuous service.

Is gratuity payable during layoffs or retrenchment?

Yes, if an employee is laid off or retrenched after completing five years of service, they are entitled to gratuity. The amount will be calculated based on the same formula as mentioned earlier.

What documents are needed to claim gratuity?

To claim gratuity, you typically need to submit the following documents:

1. A gratuity claim form ( Will be provided by your employer).
2. KYC.
3. Relieving letter from the employer (if applicable).
4. Any other documents specified by your employer’s policy.

Can gratuity be transferred if I change jobs?

Gratuity is not transferable between employers. However, if you are moving to a new job, you will have to claim your gratuity from your previous employer upon leaving and will be eligible to calculate gratuity with your new employer once you meet the service requirement again.

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