Gratuity Calculator

Gratuity is calculated based on employee's basic salary and years of working experience in India.

* Basic Salary

Dearness Allowance (DA)

Is Person Dead or Disablement ?

Yes No

Number of Years/Months In Service :

* Years Enter Year Greater Than or Equal 5

Months

Gratuity Calculations

Gratuity calculation detail :

Gratuity is a part of salary that is received by an employee from his/her employer in gratitude for the services offered by the employee in the company. Gratuity is a defined benefit plan and is one of the many retirement benefits offered by the employer to the employee upon leaving his job. An employee may leave his job for various reasons, such as retirement / superannuation, for a better job elsewhere, on being retrenched or by way of voluntary retirement.

Formula :

Gratuity Calculation = [ (Basic Pay + D.A) x 15 days x No. of years of service ] / 26
Where, D.A = Dearness Allowance.
End of Service Benefits Eligibility :

Any person employed on salary.
At the time of retirement or resignation or on superannuation, an employee should have rendered continuous service of not less than five years.
Payable without completion of five years only when death and disablement.

Consider following example to understand the Gratuity calculations:

Calculate gratuity amount for a given Basic Pay = 26,000, DA = 1,500 and Years of Service = 20
Solution :

= ( ( 26,000 + 1,500 ) * 15 * 20 ) / 26
= ( 27,500 * 300 ) / 26
= 8250000 / 26
= 317307.69
Therefore, Gratuity amount is Rs. 3,17,307.69

Gratuity - Frequently Asked Questions

1. Am I eligible to receive Employees Gratuity Benefit Amount ?

After completing five years of continuous service with the same company, you are eligible to receive the gratuity benefit. Gratuity shall be payable to ‘you’ (employee) on the termination of your employment after rendering continuous service for not less than five years.

2. When is Gratuity Amount paid ?

It is payable..

On Superannuation (or) Retirement.
On your Resignation (or) Termination.
On death or Disablement due to accident or disease.
On Retrenchment (or) Layoff.
VRS (Voluntary Retirement Scheme).

3. Is five years continuous service rule applicable to all the above events ?

The condition of five years of continuous service is not applicable if employee’s service is terminated due to death or disablement. Your nominee or legal heir can receive your gratuity amount (in the event of death of the employee).

4. Gratuity is part of my CTC. I have left company before completing 5 years. Can I claim my gratuity as it was mentioned in my CTC ?

Gratuity is payable only when an employee completes 5 years of continuous service. If an employee leaves company before 5 years then employee is not eligible for gratuity irrespective whether same was part of employee CTC or not.

5. Are Temporary staff or Contract workers eligible to receive Gratuity amount ?

Temporary staff, contract workers etc., are all eligible (except ‘apprentice’) for the gratuity amount, as long as they are considered as employees of the organization.

6. Is 4 years 10 months (any period above 4.5 years of service) considered as 5 years ?

In one of the court cases, Madras High Court has held that an employee who has completed 4 years and 240 working days in 5th year will be entitled for gratuity i.e. 4 years 10 months and 11 days.

7. My landlord does not have PAN. How do I claim tax deduction on HRA ?

It is necessary to get PAN details of your employer to claim tax benefits on HRA. However, if your landlord does not have a PAN then you must get a declaration from him regarding the same. It is better that you get these details (PAN or declaration) before you take place on rent in order to avoid hassles at the time of filing return.
This judgment may or may not be applicable to you (it depends on the place of your establishment). It is better to contact your HR (Human Resource) personnel to get more clarity regarding this point.

8. Is Nomination facility available ?

Yes, you can give your nomination by filling Form “F” at the time of joining your company (during new joinee formalities). Employee can nominate one or more members of his/her family to receive the gratuity amount in the event of the death of the employee.

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Gratuity - Frequently Asked Questions