Use the gratuity calculator to know the exact gratuity amount in a few simple clicks!
When an employee renders services to an organization for 5 or more years, he is eligible to receive a certain amount of money from the employer; this is known as Gratuity. It is a form of cash benefit governed by the Payment of Gratuity Act 1972.
The gratuity amount is generally paid at the time of retirement, resignation, layoff, or termination, provided that the employee has rendered five or more years of service in the organization. However, in certain cases like an accident or disease, an employee can get the gratuity before the five years.
An employee is eligible to receive gratuity when the following criteria are met:
Calculating your gratuity amount can be a time-consuming process. Since every person has a different pay scale, the gratuity amount also varies. A Gratuity calculator is a tool that helps you get an estimate of the Gratuity amount you will receive. If you are planning to retire from the company, the calculator can be useful in determining the gratuity amount.
Zimyo uses a standard formula for calculating formula gratuity that is given below:
G= N*B*15/26
In the formula, the values represent the following things.
N – Number of years an employee has worked in the organization
B– Last drawn basic salary plus dearness allowance (DA) of an employee
G– Gratuity amount an employee is eligible to receive
To better understand the calculation, let’s take an example. If employee A has worked with the organization for 5 years, his basic salary plus dearness allowance amounts to 25,000. Hence:
The amount of gratuity would be: 5*25000*15/26= 72,115
You should keep in mind two important points:
Follow these steps to calculate the gratuity amount using the Zimyo gratuity calculator:
To know about the employee salary breakup format and structure, you can visit- Guide to Salary Slip Format in India
To know about the compliance deductions, you can visit – Updated Statutory Compliance Checklist in 2022
Also Checkout – Take-Home Salary Calculator