Gratuity Calculator
What is a Gratuity Calculator?
Calculate statutory gratuity payout upon retirement or resignation based on total tenure years, last drawn basic salary + DA, and the official formula `(15 * Basic * Tenure) / 26`.
Why Use This Tool?
- Employee Resignation / Retirement: Know your exact legal gratuity entitlement after completing 5 or more years of continuous service.
- HR Final Settlement: Compute accurate full & final settlement payouts for exiting team members.
- Tax Exemption Planning: Check statutory tax-free gratuity exemption caps.
How to Use
- Enter Last Drawn Monthly Basic Pay + Dearness Allowance (DA).
- Enter Total Completed Service Tenure (Years and Months).
- View calculated statutory gratuity amount and tax exemption status.
Real Working Example
Input:
Basic + DA: $4,000/month | Service Tenure: 7 Years 8 Months (Rounds to 8 Years)
Output Result:
Gratuity Payable: (15 * $4,000 * 8) / 26 = $18,461.54 | Tax Exemption: 100% Tax Free
Important Technical Details & Formulas
- Official 15/26 Formula: Uses statutory formula `(15 / 26) * Last Basic * Completed Years`.
- Rounding Rule (6+ Months): Tenure above 6 months in a partial year rounds up to a full year automatically.
- Client-Side Engine: Instant calculation in browser memory.
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Frequently Asked Questions
Is 5 years of continuous service mandatory to claim gratuity payout?
Yes, statutory labor laws require a minimum of 5 continuous years of service with the same employer.
What is the official statutory formula for gratuity calculation?
Gratuity = (15 * Last Drawn Basic Salary + DA * Tenure in Years) / 26.
How are partial service months rounded in gratuity calculations?
Service of 6 months or more in a partial final year rounds up to 1 full year automatically.
What is the maximum tax-free gratuity exemption limit?
Statutory rules cap tax-free gratuity payouts up to legal exemption limits.
Does basic pay include House Rent Allowance (HRA) for gratuity?
No, gratuity calculations include only Basic Salary and Dearness Allowance (DA).