Gratuity Calculator
🧾 Gratuity Calculator: A Simple Guide to Understanding and Estimating Your Gratuity
What is Gratuity?
Gratuity is a lump sum amount paid by an employer to an employee as a token of appreciation for the services rendered. It is governed by the Payment of Gratuity Act, 1972, and is applicable to employees who have completed at least five years of continuous service with the same employer.
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📐 Gratuity Formula
For employees covered under the Gratuity Act, the formula is:
Gratuity = (15 × Last Drawn Salary × Years of Service) / 26
Where:
- Last Drawn Salary = Basic + Dearness Allowance (DA)
- 15 = Number of days salary for each year of service
- 26 = Average number of working days in a month
✅ Eligibility Criteria
To be eligible for gratuity:
- You must have completed a minimum of 5 years of continuous service.
- Your organization must have 10 or more employees.
🧮 How to Use the Gratuity Calculator
This calculator helps you estimate the gratuity amount you may receive upon retirement or resignation.
Steps:
- Enter your last drawn monthly salary (Basic + DA).
- Enter the total number of years you have worked with the organization.
- Click on “Calculate Gratuity”.
- The calculator will display your estimated gratuity amount.
📊 Example Calculation
If your last drawn salary is ₹30,000 and you have completed 10 years of service:
Gratuity = (15 × 30,000 × 10) / 26 = ₹173,076.92
🎯 Benefits of Using the Calculator
- Quick and easy estimation
- Helps in financial planning
- Understand your retirement benefits
⚠️ Important Notes
- The actual gratuity amount may vary based on company policies and applicable laws.
- For employees not covered under the Act, the formula may differ.
- Some companies may offer higher gratuity as part of their internal compensation policies.
📝 Conclusion
Gratuity is a valuable retirement benefit that rewards long-term service. Using the Gratuity Calculator allows you to plan your finances better and understand your entitlements. Make sure to check your eligibility and use the calculator to get a quick estimate.
