# Gratuity Calculator in India

Use the gratuity calculator to know the exact gratuity amount in a few simple clicks!

## Enter the required details to check Gratuity amount

Total Gratuity Payable: 0

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.

## What is gratuity?

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.

## What are the Eligibility Criteria for Gratuity Payment in India?

An employee is eligible to receive gratuity when the following criteria are met:

• Employee should be eligible for superannuation
• Employee retired from the services
• Employee resigned after continuous services of five years or more
• In case of death or disability due to illness or accident

## What is a Gratuity Calculator?

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.

## Gratuity Calculation Formula

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

## Gratuity Rules 2024

You should keep in mind two important points:

1. According to the gratuity act, the gratuity amount cannot be more than 20 lakh. Any excess amount would be considered ex gratia payment.
2. For calculating the gratuity amount, the number of months of the last employment year will be rounded to the nearest figure. For example, if you have worked in the organization for 6 years and 7 months, you will receive gratuity for 7 years. If it has been 6 years and 5 months, you would have received gratuity for only 6 years.

## How to Calculate Gratuity Online using Zimyo Gratuity Calculator?

Follow these steps to calculate the gratuity amount using the Zimyo gratuity calculator:

• Enter your last drawn basic salary plus dearness allowance in the first input field
• Enter the number of years you worked in the organization (use the nearest rounded figure)
• Click on the calculate to get your gratuity value within seconds

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

## Benefits of using Zimyo Gratuity 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.

## What are the taxation rules for calculating gratuity amount?

The taxation rules for gratuity varies from employee to employee.

• The amount received by any government employee( state/local or central) is exempted from Income tax.
• Any other private employee whose employer is covered under the Gratuity Act. Here following amount are exempted from Income tax.

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)/30Â

You can make use of this simple formula to calculate your gratuity amount or use gratuity calculator for convenience.

Tenure of ServiceÂ  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â Amount payable(gratuity)

Less than a yearÂ  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  2*basic salary amount

1-5yearsÂ  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â 6*basic salary

5-11 yearsÂ  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â 12*basic salary

11-20 yearsÂ  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â  Â 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.