Gratuity Calculator Online

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A gratuity calculator helps you to determine the amount you will receive. The estimated amount can help you plan your financial goals like retirement or fund other significant expenses in advance.

Any private company employee that provides EPF facilities is eligible to receive an amount as a gratuity after completing five years of service. However, an employee can also get a five-year bonus. Suppose you were injured and disabled in an accident or due to a disease. The money depends on the last drawn salary and the service years served by the organization.

What is Gratuity?

It is the amount that an employer pays his employee in exchange for services provided to the organization.

Gratuity Calculation Formula:

The formula for gratuity calculation is as follows:

G = n*b*15/26

N/n: Number of years (you have worked in the particular company)

B/b: Last drawn basic salary plus DA(Dearness Allowance)

G:Gratuity amount

Example

if individual X has worked with a company for five years, and his basic salary plus DA amounted to Rs. 30,000 monthly, he will receive 5*30000*15/26 = Rs. 86,538.46 as Gratuity.

Note that under the existing laws:

  • Your Gratuity must be at most Rs 10 Lakh in its entirety. Any money beyond this upper limit is called an ex gratia payment.
  • Also, if you have worked for 17 years and six months, the figure will be rounded to the near single digit or 18 years.

How can a Gratuity Calculator Help us?

Under the Gratuity Payment Act of 1972, you can receive the gratuity amount.

  • You are near the age of allowance.
  • Must complete five years of work in the same organization continuously.
  • You do not have any other full-time employment.

In these cases, a gratuity calculator online is helpful because

  • The calculator helps you ascertain the precise amount due to you.
  • A gratuity calculator saves you valuable time and other resources.
  • It helps you in long-term financial planning.

How to Use Gratuity Calculator?

Follow the steps to use the gratuity calculator online.

  • Do all essential details about your employment history handy.
  • Enter the basic pay + dearness allowance (DA) value, and the gratuity value will reflect within seconds.

Advantages of Using Gratuity Calculator:

These are the Gratuity Calculator advantages:

  • Data security is of paramount importance. Our servers are safe and secure to use.
  • An online calculator is easy to use and requires no technical expertise.
  • The gratuity calculator is always right.

Taxation Rules for Gratuity

These are the Taxation rules for the gratuity amount depending on the employee type:

The gratuity money received by any government employee is exempt from income tax.

For private-sector employees, the lesser of the three amounts of income tax exemption provided that the employer has covered under the Gratuity Payment Act.

  • Rs 20 lakh
  • The actual gratuity money received
  • The eligible Gratuity

The maximum tax-exempt gratuity amount an employee can claim in their professional life should be Rs 20 lakh.


FAQ'S


Is the gratuity calculator free to use?

Yes, the gratuity calculator online is free to use.

What is a gratuity calculator?

A gratuity calculator is a tool that gives you an estimate of the amount you would receive on quitting the job(company) after rendering a continual five years of service. A calculator is a handy tool to calculate the Gratuity on retirement from a particular company.

When is the Gratuity amount payable to an individual?

Only individuals who have completed five years of service with an organization are eligible for Gratuity. However, Gratuity has typically paid at retirement and when leaving employment. The Gratuity may also pay in the event of unforeseen circumstances, such as the death of an employee.

When is Gratuity payable to an employee?

  • Retirement
  • Resignation or termination
  • Layoff
  • Voluntary Retirement Scheme
  • Disability or death

However, the employee should complete five years of continual employment in all the above cases except for death or disability.

How can I calculate my Gratuity?

But the number of days will change from 26 to 30 days. The Gratuity formula is: Gratuity = (15 × last drawn salary × working tenure)/30.