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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 an amount that 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
The Zimyo Gratuity Calculator is an easy-to-use tool, where you just have to enter the last salary drawn and number of years of service. It gives you an estimate of gratuity an employee would receive after giving five or more years to an organization.
The gratuity calculator shows the gratuity amount within seconds of entering the basic details. It helps an individual to plan his future or retirement according to his need for a maximum amount of return.
An individual can access the gratuity calculator from the comfort of their home or anywhere to get the gratuity amount.
The taxation rules for gratuity varies from employee to employee.
a. 20 lakh
b. The actual amount of gratuity received by an employee
c. The actual gratuity amount
Whichever amount is lower from the above amount is exempted from Income tax.
Let’s understand this with a simple example- An employer had paid a gratuity amount of 14 lakh to an employee. As per the above rules it s lower than the limit, so it is non taxable.
Gratuity calculation formula= (15* last drawn salary*working tenure)/30
You can make use of this simple formula to calculate your gratuity amount or use gratuity calculator for convenience.
Tenure of Service Amount payable(gratuity)
Less than a year 2*basic salary amount
1-5years 6*basic salary
5-11 years 12*basic salary
11-20 years 20*basic salary
Gratuity amount is totally dependent upon total number of years served and last year salary drawn.
Gratuity=A*B*15/26 and 15 being the days out of a total of 26 working days.
The employer has to serve a minimum of 5 years in the company continuously. Even on the death of employer, gratuity amount can be released before 5 years.