Minimum 5 years of continuous service required for eligibility
Generally applies to organizations with 10+ employees
Payout Summary
₹1,44,231
(15 * ₹50,000 * 5 years) / 26
Note: Gratuity payout received is fully exempt from tax up to ₹25 Lakhs for employees covered under the Act. Any excess is taxable.
How Gratuity Payout is Calculated
Gratuity is a financial reward given by an employer to an employee for their services rendered to the organization. It is governed by the Payment of Gratuity Act 1972.
Formula for Employees Covered under the Act:
Gratuity = (15 * Last drawn salary * Number of completed years of service) / 26
Here, 26 days represents working days in a month, and 15 represents half-month wages.
Formula for Employees NOT Covered under the Act:
Gratuity = (15 * Last drawn salary * Number of completed years of service) / 30
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How to Calculate Your Gratuity Payout
- Enter your monthly basic salary + dearness allowance (DA).
- Select your continuous years of service (minimum 5 years is required by law).
- Toggle whether your company is covered under the Payment of Gratuity Act 1972.
- Check the final gratuity amount and read the step-by-step mathematical explanation.