Gratuity Calculator
What is a Gratuity Calculator?
A Gratuity Calculator is a tool used to compute the gratuity amount an employee is entitled to receive upon completing a certain period of service, as per the Payment of Gratuity Act, 1972 in India. Gratuity is a lump sum benefit given by an employer to an employee as a token of appreciation for long-term service.
Gratuity Calculator Formula
The formula for gratuity calculation depends on whether the employee is covered under the Gratuity Act or not.
1. For Employees Covered Under the Gratuity Act
Gratuity is calculated as:
Basic Pay = Last drawn basic salary + Dearness Allowance (DA)
✔ 15 days of salary is given for every completed year.
✔ 26 is the assumed number of working days in a month.
Example:
(50,000 × 15 × 10) / 26 = ₹2,88,462
2. For Employees Not Covered Under the Gratuity Act
For employees not covered under the act, the formula changes slightly:
✔ Here, **30 days** is considered instead of **26**.
Gratuity Calculator Online
Several websites offer online gratuity calculators where you can enter:
- Basic Pay + DA
- Number of Years Worked
- Company Eligibility (Covered under Gratuity Act or not)