Online Gratuity Calculator for Employee Gratuity Amount

How to Use the Gratuity Calculator

Step 1: Enter Your Basic Salary

Enter your last drawn monthly basic salary.

Step 2: Add Dearness Allowance

Enter your monthly dearness allowance if DA is applicable to your salary.

Step 3: Enter Your Years of Service

Enter your completed years of continuous service with your employer.

Step 4: Calculate Your Gratuity

Click the calculate option to estimate your gratuity based on the details entered.

Step 5: View Your Results

Check the estimated gratuity amount and the salary and service details used for the calculation.

Inputs Required

The Gratuity Calculator requires the following details:

• Basic Salary: Enter your last drawn monthly basic salary.
• Dearness Allowance (DA): Enter your monthly DA if it forms part of the wages considered for gratuity calculation.
• Years of Continuous Service: Enter your completed years of continuous service with your employer.

Gratuity Calculator Formula

For an employee covered under the Payment of Gratuity Act and paid on a monthly basis, the statutory formula is:

Gratuity : (Last Drawn Wages × 15 × Completed Years of Service) ÷ 26

For this calculation:

• Last Drawn Wages: The wages considered under the applicable gratuity rules.
• 15: Fifteen days' wages for each completed year of service.
• 26: The number used to calculate 15 days' wages from the monthly rate.
• Years of Service: Each completed year of service, including a part of a year exceeding six months, is considered under the Act.

The calculation of wages for gratuity purposes can depend on the applicable statutory definition and the employee's circumstances. Therefore, the calculator provides an estimate rather than a final legal or employer-approved amount.

Example Gratuity Calculation

Example Gratuity Estimate

Last Drawn Basic Salary : ₹50,000 per month

Dearness Allowance (DA) : ₹5,000 per month

Years of Continuous Service : 10 years

Estimated Calculation

Gratuity Eligibility Under the Payment of Gratuity Act

For employees covered under the Payment of Gratuity Act, gratuity is generally payable when employment ends after at least five years of continuous service due to retirement, resignation, or superannuation. The five-year requirement is not necessary in certain cases, including death or disablement. Current rules also provide for gratuity in certain fixed-term employment situations.

Eligibility can depend on the employee's circumstances and the applicable statutory provisions.

Gratuity for Employees Not Covered Under the Act

If an employer or employee is not covered by the Payment of Gratuity Act, the calculation and eligibility may depend on the employment contract, company policy, or other applicable rules. The statutory formula under the Payment of Gratuity Act should not automatically be applied to every employee. Check the applicable employment terms before treating the calculator result as the final gratuity amount

Tax Treatment of Gratuity

Gratuity may qualify for tax exemption subject to the applicable provisions, employment category, exemption limits, and tax rules in force when the gratuity is received. Tax treatment can differ between government employees and other employees. The applicable exemption should be checked based on the employee's circumstances and the current tax provisions.