About Gratuity

Gratuity is a statutory employee benefit provided under the Payment of Gratuity Act, 1972 in India. It is a lump-sum amount paid by an employer to an employee as a token of appreciation for long-term service with the organization.

Employees become eligible for gratuity after completing 5 continuous years of service with the same employer, subject to applicable laws and company policies.

Key Features of Gratuity

Applicable for eligible employees under Indian labour laws
Calculated based on last drawn salary and years of service
Supports retirement, resignation, superannuation, and termination scenarios
Helps employees estimate end-of-service benefits accurately
Useful for payroll planning and financial forecasting

Standard Gratuity Formula

Gratuity = (Last Drawn Salary × 15 × Years of Service) ÷ 26

Where:

Last Drawn Salary = Basic Salary + Dearness Allowance (DA)
15 = 15 days salary for every completed year of service
26 = Number of working days in a month

Important Note

Employees are generally eligible for gratuity after completing 5 years of continuous service.
Any service period exceeding 6 months may be rounded off to the next completed year as per gratuity rules.
Gratuity calculation may vary based on company policies, employment contracts, and applicable statutory provisions.
Tax exemption on gratuity is subject to prevailing Income Tax regulations in India.
This calculator provides an estimated gratuity amount for informational purposes only and should not be considered legal or financial advice.