What is a Gratuity Calculator?

A Gratuity Calculator is an online tool used by employees to calculate the lump sum amount that their employer must give them for their long service. You'll use it whether you're retiring, resigning, or moving to a new job. This calculator will do the heavy lifting for you with just a few pieces of information.

You will enter things like:

• Last Drawn Salary (basic + DA)
• Total Years of Service
• Type of Company (covered under Payment of Gratuity Act, 1972, or not)

Once you enter the information, the calculator will calculate the gratuity payable based on the employee's tenure, the type of company they work (payment of gratuity act, 1972), and exemptions on taxation for the purpose of determining gratuity for tax purposes. So you can easily plan your finances, understand your retirement benefits, and negotiate or advocate for better salaries altogether.

How Does Our Gratuity Calculator Work?

Calculating gratuity manually can be perplexing as companies covered under the Gratuity Act have different rules under the Act than those companies not covered under the Act. Our Gratuity Calculator will make it easier to calculate gratuity in as few as four steps.

1. Last Drawn Salary (INR) - Basic salary + Dearness Allowance.
2. Number of years of service - Completed years in company.
3. Type of company - Covered or non-covered under the Gratuity Act.
4. Click Calculate - Your gratuity amount will be calculated instantly.

Formula for Companies Covered Under the Gratuity Act

Gratuity = (Last Drawn Salary × 15 × Years of Service) ÷ 26

For Non-Covered Companies - the formula is simply adjusted to the actual number of working days in a month, and not fixed to 26.

Thus, we ensure accuracy and save you from mistakes involved with manual math.

Key Features of Our Gratuity and Tax Calculator

• Covers Act & Non-Act Employers – Our application works for any and all organizations.
• Instant Results – Instant and accurate gratuity amounts in seconds.
• Tax Estimation Information – Understand taxable and tax-free components of your gratuity.
• Automatically Check Tax-Free Limits – Understand if your gratuity is within the ₹20 lakh limit.
• Easy-to-Use – Just fill in a few input fields - no complex forms to fill out.
• Cross Device Compatible – The application works on desktop, mobile, and tablets.

Why Use an Online Gratuity Calculator?

• Accurate Calculation – Avoid any errors in manual calculations.
• Understand what portion is taxable – Instantly see what is taxable and tax-free.
• Retirement Planning – Understand your entitlements to plan your post-retirement life.
• Save Time – No need for Excel sheet, and external help.
• Better salary discussion – Understand your entitlements before accepting another job offer.

Example – Using Our Gratuity Calculator

Suppose:

• Last Salary (Basic + DA): ₹50,000
• Years of Service: 12
• Company Type: Covered under Gratuity Act

Calculation:

Gratuity = (₹50,000 × 15 × 12) ÷ 26

= ₹3,46,154 (approx.)

Under current income tax laws, gratuity up to ₹20 lakh is tax-free. Any amount beyond this is taxable.

Who Should Use This Gratuity Calculator?

• Employees considering Retirement – To understand post employment benefits.
• Employees Changing Jobs in Other Organizations (5+ years of Service) – To work out gratuity before proceeding with a change of jobs.
• HR Professionals – To do a quick benefit estimate for employees.
• Payroll & Finance Teams – To accurately calculate salary structures.
• Tax & Financial Advisors – To confidently advise clients with real values.

Benefits of Using This Gratuity Calculator Online

• Fully Online Tool - No Installation or signing-in is needed.
• Tax-Friendly - You can see at a glance how much of your gratuity is taxable and how much is tax-free.
• All Employers Covered - Has been developed to be effective for Act and Non-Act companies.
• Supports Retirement Planning and Job Change Planning - Will help employees make an informed decision.
• Easy Tool For All users - Employees, HR’s, finance planner’s and consultants.