Gratuity Calculator
Quickly calculate the gratuity amount an employee is entitled to receive under the Payment of Gratuity Act, 1972. Our Gratuity Calculator helps employees estimate their gratuity payout based on their tenure and last drawn salary, ensuring clarity on retirement or resignation benefits. Employers can also use this tool to ensure compliance with gratuity payment regulations.
Gratuity Amount: ₹
About Gratuity Calculator
Find answers to common questions about Gratuity and how our Gratuity Calculator can help you plan your retirement.
Gratuity is a monetary benefit given by an employer to an employee in acknowledgment of their service to the organization. Organizations with 10 or more employees are obligated to pay gratuity after the employee completes 5 years of service. Gratuity is also provided to the employee or their family in specific cases such as sudden death, disability, retirement, or superannuation.
The HRStop Payroll Gratuity Calculator is utilized to compute the gratuity amount an individual will receive based on their tenure in an organization. It considers salary components like Basic Pay, Dearness Allowance, and service duration. The formula for employees covered under the Gratuity Act of 1972 is:
Gratuity Amount = 15 days Average Pay * Tenure of Working
Average Pay = ((Last drawn Basic + DA) / 26 working days of a month) * 15 days
Calculations apply for employees not covered under the Gratuity Act: Gratuity Amount = 15 days Average Pay * Tenure of Working
Average Pay = ((Last drawn Basic + DA) / 30 working days of a month) * 15 days
Gratuity Amount = 15 days Average Pay * Tenure of Working
Average Pay = ((Last drawn Basic + DA) / 26 working days of a month) * 15 days
Calculations apply for employees not covered under the Gratuity Act: Gratuity Amount = 15 days Average Pay * Tenure of Working
Average Pay = ((Last drawn Basic + DA) / 30 working days of a month) * 15 days
Employees are eligible for gratuity if:
- They resign after completing 5 or more years in a single organization.
- They reach the retirement age.
- They suffer a disability during work.
- They are eligible for superannuation in an organization.
- They resign after completing 5 or more years in a single organization.
- They reach the retirement age.
- They suffer a disability during work.
- They are eligible for superannuation in an organization.
In HRStop Payroll, gratuity is automatically calculated during termination if the employee has completed 5 or more years in the organization. The calculation is based on the formula:
Gratuity Amount = 15 days Average Pay * Tenure of Working
Average Pay = ((Last drawn Basic + DA) / 26 working days of a month) * 15 days
The calculated gratuity amount is populated in the employee's termination payroll, with the option to override if necessary.
Gratuity Amount = 15 days Average Pay * Tenure of Working
Average Pay = ((Last drawn Basic + DA) / 26 working days of a month) * 15 days
The calculated gratuity amount is populated in the employee's termination payroll, with the option to override if necessary.
Taxation on gratuity varies based on the type of employee.
- For Government employees, the entire gratuity amount is exempted from tax.
- For private sector employees covered under the Gratuity Act of 1972, exemptions are based on specific criteria.
- For private sector employees not covered under the Gratuity Act, different criteria apply for exemptions.
- For Government employees, the entire gratuity amount is exempted from tax.
- For private sector employees covered under the Gratuity Act of 1972, exemptions are based on specific criteria.
- For private sector employees not covered under the Gratuity Act, different criteria apply for exemptions.
The statutory limit imposed by the Government on gratuity is ₹20 lakhs.
Organizations are required to release an employee's gratuity within 30 days of the full and final settlement date. If there is any delay, the employer must pay interest on the gratuity amount as per specified rates.