Gratuity Calculator (Payment of Gratuity Act)
Gratuity is a lump sum an employer pays when you leave after at least five years of continuous service. Under the Payment of Gratuity Act it is 15 days' wages for every completed year, based on your last drawn basic + DA, and is tax-exempt up to ₹20 lakh.
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Formula
Gratuity = (15 ÷ 26) × last drawn monthly salary (basic + DA) × completed years of service, capped at ₹20,00,000.
Example
With a last drawn basic + DA of ₹60,000 and 10 years of service, gratuity = 15/26 × 60,000 × 10 ≈ ₹3,46,154.
Frequently Asked Questions
Who is eligible for gratuity?
Employees who complete at least five years of continuous service with an employer covered by the Payment of Gratuity Act are eligible.
Is gratuity taxable?
Gratuity is tax-exempt up to ₹20 lakh for covered employees; any amount above the cap is taxable as salary income.
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