Gratuity Calculation as per the Payment of Gratuity Act, 1972 (India)

Gratuity is a benefit given to an employee for services rendered to the organization. It is governed by the Payment of Gratuity Act, 1972 in India.

Eligibility for Gratuity:

• The employee must have served for at least 5 years with the organization.
• Gratuity is payable on resignation, retirement, or death.

Gratuity Calculation Formula:

The formula for calculating gratuity is as follows:

Gratuity = (15 / 26) * Last Drawn Salary * Years of Service

Where:

• 15 represents 15 days salary
• 26 represents the average number of working days in a month
• Last Drawn Salary is the Basic Salary + Dearness Allowance (DA)
• Years of Service is the number of completed years. If the service period is more than 6 months in the last year, it is considered as one full year.

Maximum Gratuity Amount:

The maximum gratuity amount payable is capped as per the Gratuity Act (the current limit should be verified and included here, as it changes from time to time). This calculator will cap the gratuity amount accordingly.

How to Use the Calculator:

1. Enter your last drawn basic salary.
2. Enter your Dearness Allowance (DA).
3. Enter the number of completed years of service (round up if service is more than 6 months in the last year).
4. Click "Calculate" to see the estimated gratuity amount.

Disclaimer: This calculator provides an estimated gratuity amount. Actual amounts may vary. Consult with your HR department or a financial advisor for precise calculations.