Gratuity Calculator

Gratuity is a benefit given by an employer to an employee as a token of appreciation for their service and loyalty. It is typically calculated as a certain percentage of an employee's salary, based on the number of years they have worked for the company. The gratuity amount is paid to the employee upon the completion of a certain period of service or upon retirement, and is meant to provide financial security for the employee in their later years.

Monthly salary(Basic+DA)
Years of service
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₹ 4,03,846
Payable Gratuity
How to use this calculator?
Gratuity is a benefit given by an employer to an employee as a token of appreciation for their service and loyalty.
Gratuity is considered a long-term benefit, as it provides financial support to employees after they leave the company. It is usually paid in addition to any other benefits, such as severance pay, pension, or retirement benefits.
Calculating your gratuity can help with retirement planning, financial security, understanding your benefits, negotiating employment terms, and budgeting.
Gratuity paid by the government to government employees is fully exempt from tax while others are taxed as follows
The least of the following is exempt from tax:
  • Last salary (basic + DA)* number of years of employment*15/26;
  • Rs. 20 lakhs (which has been hiked from Rs. 10 Lakh as per the amendment);
  • Gratuity Actually received
Gratuity is a benefit given by an employer to an employee as a token of appreciation for their service and loyalty. It is typically calculated as a certain percentage of an employee's salary, based on the number of years they have worked for the company. The gratuity amount is paid to the employee upon the completion of a certain period of service or upon retirement, and is meant to provide financial security for the employee in their later years.
Gratuity is considered a long-term benefit, as it provides financial support to employees after they leave the company. It is usually paid in addition to any other benefits, such as severance pay, pension, or retirement benefits.
Calculating your gratuity can provide important information about your financial future and help you make informed decisions about your employment and financial planning. Calculating Gratuity can help in the following ways,
  • Retirement planning: Gratuity can provide a significant source of income for employees during their retirement years, so it's important to calculate the amount you're eligible for and factor it into your retirement planning.
  • Financial security: Gratuity is paid to employees upon retirement or completion of a certain period of service, and can provide financial security during a time when regular income may have ceased.
  • Understanding your benefits: Calculating your gratuity can help you understand your total employee benefits package and how much you will receive when you retire or leave the company.
  • Negotiating employment terms: If you're considering a job offer, calculating your potential gratuity can help you determine the total compensation package and make an informed decision about the offer.
  • Budgeting: Calculating your gratuity can help you plan your budget and ensure that you have enough money to meet your financial obligations, both now and in the future.
It uses the following logic
  • The amount of gratuity for employees whose employer is covered under the Gratuity Act can be calculated using the formula:
    Gratuity = n*b*15 / 26
    Where n = Tenure of service completed in the company
    b = Last drawn basic salary + dearness allowance
    As per the Gratuity Act, the amount of gratuity cannot be more than Rs 20 lakh. Any excesses would be treated as ex-gratia.
    If the number of years you have worked in the last year of employment is more than six months, then it will be rounded to the nearest figure. Suppose your tenure of service is 16 years 7 months, then you receive the gratuity for 17 years. Otherwise, its for 16 years if it happens to be 16 years 4 months.
  • For employees whose employer is not covered under the Gratuity Act, the gratuity amount would be calculated as per the half-month salary on each completed year of service.
The formula is: (15 * Your last drawn salary * the working tenure) / 30.
FundsIndia Gratuity calculator is very intuitive and does not require any technical knowledge. Just plug in your monthly salary and tenure of service and the calculator will give you your precise gratuity amount.
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