Gratuity Calculator
Calculate employee gratuity as per rules of Gratuity Act 1972. Free, accurate and instant calculations for HR professionals in India.
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Gratuity Calculator
Enter employee details to calculate gratuity as per Indian law
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Fill in the employee details and click calculate to get the gratuity amount
About Gratuity in India
Understanding the Payment of Gratuity Act 1972 and calculation rules
What is Gratuity?
Gratuity is a monetary benefit paid by employers to employees as a token of appreciation for the year of services served. It comes under the Payment of Gratuity Act 1972.
Eligibility Criteria
- Minimum 5 years of continuous service
- Applicable to organizations with 10+ employees
- Payable on retirement, resignation, death or permanent disability.
Maximum Limit
Maximum gratuity amount as per current law (updated in 2024)
Gratuity Calculation Formula
Understanding how gratuity is calculated as per Indian law
Gratuity calculation
Most common formula for organizations with 10+ employees
- • Maximum gratuity amount is capped at ₹25,00,000
- • Only Basic Salary + Dearness Allowance is considered
- • Minimum 5 years of continuous service required
- • The calculations and insights shared in this tool are intended for company-level understanding only.
- • Please consult with your tax advisor or legal professional to confirm the applicability and accuracy of gratuity or other statutory calculations for your specific case.
Calculation Examples
Real-world examples to understand gratuity calculations
Example 1: Software Engineer
Example 2: Manager
Frequently Asked Questions
Common questions about gratuity calculation in India
What is included in 'last drawn salary' for gratuity calculation?
Only Basic Salary and Dearness Allowance are considered. Other allowances like HRA, transport allowance etc. are not included.
Can gratuity be paid in installments?
No, gratuity must be paid as a lump sum within 30 days of it becoming payable.
Is gratuity taxable?
Gratuity up to ₹25 lakhs is exempt from tax. Any amount above this limit is taxable as per Income Tax Act.
What happens if an employee dies before completing 5 years?
In case of death, gratuity is payable regardless of the length of service. The normal 5-year rule doesn't apply.
Can an employer refuse to pay gratuity?
Gratuity can be forfeited only in cases of misconduct resulting in termination, as defined under the Payment of Gratuity Act.
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