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Estimate your gratuity payout based on your tenure and last drawn salary – simple, accurate, and hassle-free.
It is a statutory benefit paid by an employer to an employee as a token of appreciation for long-term service. It is governed by the Payment of Gratuity Act, 1972. Gratuity is payable when an employee resigns, retires, or is superannuated after completing at least five years of continuous service with a single employer. It is also payable in case of sickness or disablement.
The final gratuity amount depends on two key factors: your last drawn salary (specifically, basic salary plus dearness allowance) and your total tenure of service. Gratuity is often an important element of an employee’s retirement benefits package.
How do Retirement Calculators work?
Using a gratuity calculator online in India can assist you in several ways:
It is easy to calculate your gratuity online.
The gratuity calculator will instantly process these inputs and display the total gratuity amount payable to you.
Using a gratuity calculator offers several benefits.
The eligibility for gratuity applies as per the law. To be eligible, you must meet one of the following conditions:
If you become disabled due to an accident or illness, you become eligible for gratuity, even if you have not completed five years of service.
In the event of your death, the gratuity is paid to your nominated beneficiary.
To verify your eligibility for gratuity, consider reaching out to the human resources team of your organisation.
To ensure your gratuity amount sustains and grows, investing it wisely is important. Here are some of the best investment options to consider for your gratuity money:
As much as possible, consider diversifying your investments across asset classes. It can help manage risk effectively. Always consider factors like liquidity, taxation, and inflation, and regularly review your portfolio.
Yes. The online gratuity calculator provided by IndiaFirst Life is completely free to use. You can access them as many times as you need without any charge.
You can use the gratuity calculator an unlimited number of times. It is designed for repeated use. You can model different scenarios by changing your salary and tenure inputs to see how it affects your final gratuity payout.
No, a standard gratuity calculator is designed to compute the statutory gratuity as per the Payment of Gratuity Act. Ex gratia payments are voluntarily given and not governed by a standard formula. Hence, they are not included in the gratuity amount calculation online.
To calculate the gratuity amount in this case, round up to the next year if your service in the final year is more than six months. 16 years and 4 months would be considered as 16 years. If it were 16 years and 7 months, it would be rounded up to 17 years.
No, unfortunately, you would not be eligible. The Payment of Gratuity Act mandates a minimum of five years of continuous service to be eligible to receive the gratuity amount. Since you have worked for only 4.5 years, you do not meet this critical eligibility criterion.
Contract employees may be eligible if their employer is covered under the Gratuity Act and the contract is considered continuous employment. Otherwise, gratuity may not apply. If you work for an organisation via a third-party contractor, it is the contractor that will be liable to give you the gratuity amount once you fulfil the eligibility criteria.
No, gratuity is a statutory right. Even if an employer goes bankrupt, gratuity liability remains and must be settled before closing.
The number '15' in the formula represents the 15 days of salary for each completed year of service. The number '26' represents the number of working days in a month. It is used as a base to calculate the per-day salary from your monthly basic salary. So, (Basic Salary + DA) / 26 gives you one day's wage.
The calculation of gratuity for private employees (and government employees) depends on the last drawn salary and tenure.
After exactly five years of service, the gratuity for a covered employee is calculated as: (5 * Last Drawn Salary * 15) / 26.
For example, if the drawn salary (basic + DA) is ₹50,000, the gratuity would be (5 * 50000 * 15)/26 = ₹1,44,231.
You can use this corpus to create a retirement plan, invest in other high-yield instruments, fund your goals, and other similar objectives.
Yes, completing five years of continuous service is a mandatory eligibility criterion for receiving gratuity. This condition is not applicable in cases involving death or disablement, where the service requirement is waived.
As per the Gratuity Act, the formula for gratuity calculation requires that the employee complete at least five years of service. While using a gratuity calculator as well, you will notice that the minimum number of years you can enter in the designated field is five.
No, 4 years and 7 months of service is not eligible. The law requires a minimum of five continuous years of service. Since 4 years and 7 months is less than five years, it does not meet the eligibility threshold for gratuity payment.
Yes, the maximum gratuity amount payable under the Payment of Gratuity Act is ₹20 lakh. Any amount paid beyond this limit is considered an ex gratia payment, which the employer can give at their discretion. Ex gratia payments may have different tax implications.
An eligible employee should submit a formal application for gratuity to their employer within 30 days from the date it becomes payable. It is important to note that a claim will not be considered invalid just because the application was filed after this 30-day period.
Upon receiving the application, the employer is required to specify the gratuity amount payable to the employee within 15 days. The specified gratuity amount must be paid within 30 days from the date of receiving the application.
** Tax exemptions are as per applicable tax laws from time to time.
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