Gratuity Calculator & eligibility checker – calculate gratuity money

Gratuity Calculator and Eligibility Checker

Find out how much Gratuity money you should get
What is your last drawn monthly salary?
Include Dearness Allowance (DA) if you receive it
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How many years and months have you been working with current employer?
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Invalid number of months

You are ELIGIBLE to receive Gratuity

You are NOT ELIGIBLE to receive Gratuity.

Minimum period is 4 years and 8 months in service
Your accumulated Gratuity Amount is:
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What is Gratuity?

Gratuity, derived from the word gratitude, is a sum of money paid by your employer for all the work you have done for them over the period of time.

How to calculate Gratuity amount?

Gratuity is paid based on the number of years you have been in service with current employer, multiplied by 50% of last drawn salary.

What are the eligibilities for receiving Gratuity?

In order to receive gratuity, you need to be eligible under one of the following criterias:
1.) You should have worked continuously under the employer for a minimum of 4 years and 240 days
2.) Or, you should have reached superannuation
3.) Or you should be retiring from the job having reached the companies retirement age
4.) Or, passed away
5.) Or, incapacitated/disabled due to an accident or illness
6.) Or, you have been retrenched or laid off by the company

What is the formula for calculating Gratuity money?

Gratuity = Y*S*(15/26). Here Y is the number of years you have been working with this employer
S is the last salary you received

What is the minimum period to work to be eligible to receive gratuity?

4 years and 240 days is the minimum period you should have been with the employer to be eligible for gratuity payment

What is the maximum Gratuity you can receive?

Gratuity Act, under Section 4(3) states that the maximum amount of money that can be paid is Rs.20 Lakhs. Companies can however choose to pay you the complete amount you are due or higher than Rs.20 Lakhs as a moral obligation (ex-gratia). This entirely at the discretion of the company.

Is the number of years of service for gratuity calculation rounded up?

Yes, if you have been working for 6 years and 8 months, your number of years of service will be 7 years. On the other hand, if you worked for 6 years and 4 months, your years of service will be 6 years.

Is Gratuity exempted from tax?

Yes. If you are a Government employee or work for a company that falls under the Payment of Gratuity Act, your gratuity will be completely exempted from Tax. If you are not, then the lowest of a.)20 lakhs, b.)Actual gratuity received will be exempted from being taxed.

Can working for 5 years in two companies make you eligible for receiving gratuity?

No, you need to have worked for 5 years (4 years and 240 days minimum) in one company at a stretch

Is Gratuity impacted if I take a sabbatical?

No, you will be able to receive gratuity even if you have taken a sabbatical. The period you were on sabbatical will be considered for Gratuity calculation.

Who pays the Gratuity money?

The money needs to be paid by the employer

How long does it take to get my gratuity money?

Your employer needs to pay out the gratuity within 30 days of you resigning the organization.

Are contract employees, part time workers eligible for gratuity?

Yes, as long as the contract employee or part time staff is on payroll of the company as an employee, he/she is eligible to receive the gratuity cash

Can Interns or apprentices receive gratuity?

Interns and apprentices are usually not on the records of the company as an employee and receive a stipend instead of a salary. As such they are not eligible for gratuity money.

If employee dies after 5 years of service, can legal heir receive the gratuity?

Yes, if an employee dies, the legal heir can receive the gratuity amount from the employer.

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Abhi is a 29 yr old Indian, on FIRE to retire by 40. He has been investing and learning Finance for the past 12 years. After completing Mechanical engineering, he started working in a multi-national Bank and grew to become an AVP. Currently with an IT MNC as a VP. He lives in Bangalore with his wife and their 1 year old daughter. In his free time, Abhi loves to game on the Xbox, watch movies, read and blog.

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