Gratuity Calculator
Calculate your gratuity amount as per Payment of Gratuity Act, 1972. Get instant results based on your salary and years of service.
50K
Gratuity Amount
₹0
Calculated as per Payment of Gratuity Act, 1972
Formula Used:
Gratuity = (Last drawn salary × Years of service × 15) / 26
• Last Salary: ₹50,000
• Years: 10
• Factor: 15 days for each year of service
Understanding Gratuity
Gratuity is a lump sum amount paid by an employer to an employee as a mark of gratitude for the services rendered. It's a retirement benefit that provides financial security to employees.
Eligibility for Gratuity
- Completion of 5 years of continuous service (can be relaxed in case of death or disability)
- Applicable to organizations with 10 or more employees
- Payable on retirement, resignation, death, or disablement
Tax Implications
For Government Employees: Fully exempt from tax
For Private Employees: Exempt up to ₹20 lakhs (as per Income Tax Act Section 10(10))
Frequently Asked Questions
What is gratuity?
Gratuity is a monetary benefit given by an employer to an employee as a token of appreciation for services rendered. Under the Payment of Gratuity Act, 1972, it becomes payable after an employee completes 5 years of continuous service.
How is gratuity calculated in India?
Gratuity is calculated as: (Last drawn salary × Years of service × 15) / 26. Here, 15 represents 15 days wages for each completed year of service, and 26 represents the number of working days in a month.
Is gratuity taxable?
Gratuity received by government employees is fully tax-exempt. For private sector employees, gratuity up to ₹20 lakhs is exempt from tax. Any amount above this limit is taxable.