Gratuity Calculator
Gratuity Calculator
A Gratuity Calculator is an online tool that helps employees estimate the amount of gratuity they are entitled to receive after completing five years of continuous service in an organization. Gratuity is a lump sum paid by the employer as a token of appreciation for long‑term service, governed by the Payment of Gratuity Act, 1972.
Employees who leave a job due to retirement, resignation, or disability caused by an accident or illness are eligible for gratuity. The calculator factors in key inputs such as the last drawn basic salary, dearness allowance (DA), and number of years of service to compute the final gratuity amount.
How the Calculator Helps You
- Accurate Estimation: Avoids errors in manual calculations and provides the correct gratuity amount instantly.
- Saves Time & Effort: Quickly calculate your gratuity amount without any hassle.
- Financial Planning: Knowing your gratuity helps plan future finances effectively.
- Scenario Comparison: Calculate gratuity for different salaries and service durations to assess potential payouts.
Formula for Gratuity Calculation (Covered Under the Act)
G = n × b × 15 ÷ 26
- G: Gratuity amount payable
- n: Years of service (rounded up if > 6 months)
- b: Last drawn basic salary + Dearness Allowance (DA)
Example: 9 yrs × ₹55,000 × 15 ÷ 26 = ₹2,85,577
Cap: Maximum ₹20 lakh; any excess is ex‑gratia.
Formula for Gratuity Calculation (Not Covered Under the Act)
Gratuity = (15 × Last drawn salary × Years of service) ÷ 30
- Years rounded up if > 6 months
Example: (15 × ₹48,000 × 6) ÷ 30 = ₹1,44,000
Cap: Maximum ₹20 lakh.
Taxation Rules for Gratuity in India
- Government Employees: Fully exempt from income tax.
- Private Sector Employees: For private-sector employees covered under the Payment of Gratuity Act, 1972, the least of the following is exempt from tax:
- Actual gratuity received
- ₹20 lakh (lifetime limit)
- Eligible amount as per formula
How to Use the Gratuity Calculator on Tradejini
- Select Your Employment Type: Government or Private Sector.
- Enter Basic Salary and DA.
- Specify the Number of Years of Service.
- Click Calculate to view your gratuity amount instantly.
Why Use Tradejini’s Gratuity Calculator?
Tradejini’s Gratuity Calculator is designed to deliver quick, secure, and accurate results. Whether you’re changing jobs, planning retirement, or exploring financial options, this tool provides the clarity you need to make informed decisions about your gratuity payout.
