Gratuity Calculator
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Total Gratuity Payable
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Employees working in private organizations that offer EPF facilities are entitled to gratuity after completing five years of service. However, gratuity can also be claimed before five years in cases of injury or disability due to accidents or illness. IPOtank offers a free gratuity calculator to help you calculate the gratuity owed by your employer. Gratuity payments are governed by the Payment of Gratuity Act, 1972, with the amount depending on the last drawn salary and years of service.
Before claiming gratuity, determine your eligibility and amount using our online gratuity calculator.
Gratuity Calculation Formula
IPOtank utilizes a standardized formula for its online gratuity calculator:
G = n*b*15/26
Where:
| n | Number of years worked in the organization |
| b | Last drawn basic salary plus Dearness Allowance (DA) |
| G | Gratuity amount |
For instance, if someone has worked for five years and their monthly basic salary plus DA is Rs. 30,000, the gratuity is calculated as 5*30000*15/26 = Rs. 86,538.46.
According to existing laws:
- Gratuity is capped at Rs. 10 lakh. Any excess is considered ex gratia.
- Service periods of over six months are rounded up to the nearest year.
Benefits of a Gratuity Calculator
Under the Payment of Gratuity Act, 1972, eligibility criteria for gratuity include:
- Approaching retirement age.
- Completing five consecutive years with the same employer.
- No other full-time employment.
An online gratuity calculator is beneficial as it:
- Provides precise gratuity amounts.
- Saves time and effort.
- Can be accessed conveniently from anywhere.
- Assists in financial planning.
How to Use IPOtank's Gratuity Calculator
Follow these steps:
Step 1: Gather details about your employment history.
Step 2: Enter your basic pay and Dearness Allowance to calculate the gratuity instantly.
Advantages of Using IPOtank's Gratuity Calculator
IPOtank's Gratuity Calculator is user-friendly and secure:
- Your data is protected with advanced security measures.
- It's easy to use without technical expertise.
- The calculator provides accurate results you can rely on.
Gratuity Tax Rules
Gratuity taxation varies by employment type:
- Government employees receive tax-exempt gratuity.
- For private-sector employees, the lesser of the following is tax-exempt:
- Rs. 20 lakh.
- The actual gratuity received.
- The eligible gratuity amount.
The lifetime tax-exempt gratuity amount is capped at Rs. 20 lakh.