Gratuity Calculator

What is a Gratuity Calculator?

A Gratuity Calculator computes the lump sum amount paid by an employer to an employee in India as a token of appreciation for rendering continuous service for a specified minimum period (typically 5 years or more). It acts as a significant retirement or resignation benefit.

How is Gratuity Calculated?

Under the Payment of Gratuity Act, 1972, the formula depends on whether the employer is covered under the act. For covered employers, the calculation strictly relies on the last drawn basic salary and the total number of years served.

The Official Formula

Key Eligibility Rules

• 5-Year Rule: You must have completed at least 5 full years of continuous service with the same employer to be eligible.
• Rounding Off: If you serve 5 years and 7 months, it is rounded up to 6 years. If you serve 5 years and 4 months, it is rounded down to 5 years.
• Death or Disability: The 5-year requirement is waived in cases of death or disablement of the employee.