Gratuity Calculator
Estimate the lump-sum gratuity amount you are entitled to receive after leaving your employer based on your tenure and last drawn salary.
What is Gratuity?
Gratuity is a financial benefit provided by an employer to an employee in recognition of long-term service. It is governed by the Payment of Gratuity Act, 1972.
The 5-Year Eligibility Rule
Typically, you are eligible for gratuity if you have completed five years of continuous service with the same employer. This is waived in cases of death or disablement.
The Statutory Cap
The maximum tax-free gratuity amount an employee can receive is ₹20 Lakh. Any amount received above this limit is taxable as per your income tax slab.
Rounding of Service
For calculation purposes, service greater than 6 months is rounded up to the next year. For example, 7 years and 7 months is considered 8 years.
How Gratuity is Calculated?
Gratuity = (15 × Last Drawn Salary × Service Years) / 26
The factor '26' represents the number of working days in a month, and '15' represents 15 days of salary for every year of service.
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