Gratuity Calculator
Calculate Your Gratuity Amount as per Payment of Gratuity Act
Gratuity Calculator
Employment Type
Monthly basic salary
Monthly DA amount
Eligibility Criteria
| Condition | Private Sector | Government Sector |
|---|---|---|
| Minimum service | 5 years | 5 years |
| Maximum limit | ₹20 lakhs | ₹20 lakhs |
| Tax exemption | Full exemption if eligible | Full exemption |
| Death/disablement | Immediate eligibility | Immediate eligibility |
Gratuity Calculation Examples
Example 1: Private Employee
- Basic + DA: ₹75,000/month
- Service: 10 years 6 months
- Gratuity: ₹4,55,769
Example 2: Government Employee
- Basic + DA: ₹1,00,000/month
- Service: 25 years
- Gratuity: ₹20,00,000 (capped)
Example 3: Less than 5 years
- Basic + DA: ₹50,000/month
- Service: 3 years 8 months
- Gratuity: ₹0 (Not eligible)
📋 Important Points
Payment Timeline
Gratuity must be paid within 30 days of application
Nomination
Employees must nominate family members to receive gratuity
Forfeiture
Can be forfeited if employee is terminated for misconduct
Appeal Process
Can approach controlling authority if payment is delayed
Frequently Asked Questions about Gratuity
Gratuity is a lump sum payment made by an employer to an employee as a token of appreciation for services rendered. It's governed by the Payment of Gratuity Act, 1972.
Employees are eligible if they have completed 5 years of continuous service with the same employer. In case of death or disablement, the 5-year rule doesn't apply.
For private sector: (Last drawn salary × 15 × Years of service) ÷ 26. For government sector: (Last drawn salary × Years of service) ÷ 2 (subject to maximum limit).
The maximum gratuity amount is ₹20 lakhs as per the Payment of Gratuity (Amendment) Act, 2018. This applies to both private and government employees.
Gratuity received by government employees is fully exempt. For private employees, it's exempt up to ₹20 lakhs or 15 days' salary for each completed year, whichever is less.
Yes, an employer can forfeit gratuity if the employee's services have been terminated for acts of violence, moral turpitude, or riotous conduct.
Complete Guide to Gratuity Calculation
Gratuity Calculation Formulas
Private Sector Employees:
Gratuity = (Last drawn salary × 15 × Years of service) ÷ 26Last drawn salary = Basic + Dearness Allowance
Years of service = Full years + months/12
Government Sector Employees:
Gratuity = (Last drawn salary × Years of service) ÷ 2Subject to maximum of ₹20 lakhs
Gratuity Examples
| Employee Type | Basic + DA | Service | Gratuity |
|---|---|---|---|
| Private Employee | ₹50,000 + ₹20,000 | 10 years | ₹4,04,000 |
| Government Employee | ₹80,000 + ₹40,000 | 25 years | ₹20,00,000 |
| Less than 5 years | ₹40,000 + ₹10,000 | 3 years | ₹0 |
| Death/Disablement | ₹60,000 + ₹15,000 | 2 years | ₹1,50,000 |
Key Provisions of Payment of Gratuity Act
| Provision | Details |
|---|---|
| Applicability | Factories, mines, oilfields, plantations, ports, railway companies, shops, or establishments with 10+ employees |
| Eligibility | 5 years of continuous service (except death/disablement cases) |
| Maximum Amount | ₹20 lakhs (as per 2018 amendment) |
| Time of Payment | Within 30 days from when it becomes payable |
| Tax Exemption | Full exemption for government employees. For others: Least of (₹20 lakhs, actual gratuity, 15 days' salary for each completed year) |
| Nomination | Employee must nominate family members to receive gratuity in case of death |
Documents Required for Gratuity Claim
- Gratuity application form
- Employment proof (appointment letter, experience certificate)
- Salary slips (last 3 months)
- PAN card
- Bank account details
- Resignation letter (if applicable)
- Death certificate (in case of nominee claim)
Important Points to Remember
- Part-time service also counts towards eligibility
- Periods of leave, layoff, and strikes are included
- Fraction of year more than 6 months counts as full year
- Gratuity can be attached for debt recovery under certain conditions
- Appeal can be made to controlling authority for disputes
- Employer must maintain records for 3 years
💡 Pro Tip
Always negotiate for a higher basic salary as it directly impacts your gratuity amount. Gratuity is calculated based on last drawn basic salary + DA. Higher basic means higher gratuity.
