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Gratuity is the money that an employer gives to an employee as a thank-you for their service to the company. But, this benefit is usually given only if the employee has worked for the company for five years or more. There are some special cases, like if the employee gets disabled in an accident or due to an illness, where they can receive gratuity even before completing five years.
The amount of gratuity is based on the employee's last salary and the number of years they have worked for the company. Rules about gratuity are defined by the Payment of Gratuity Act, of 1972.
A Gratuity Calculator is a tool that helps estimate the amount you might receive when leaving your job after working continuously for five years. It uses a formula to calculate gratuity, which is a special payment from your employer as a thank-you for your long-term service.
Here's the formula:
Gratuity=(15×last drawn salary×tenure of working)/26
| Formula for Gratuity Calculation (Covered under Gratuity Act) | Gratuity = (15 × Last Drawn Salary × Tenure of Working) / 26 |
| Example Values | - |
| Last Drawn Salary | Rs 35,000 |
| Tenure of Working | 15 years |
| Gratuity Calculation | (15 × 35,000 × 15) / 26 = Rs 3,02,884.6 |
| Additional Information | - |
| Gratuity Limit (Gratuity Act) | Gratuity cannot exceed Rs 20 lakh according to the Gratuity Act |
| Rounding Up (Gratuity Act) | If tenure is more than six months in the last year, round up to the next year (e.g., 16 years and 7 months is considered 17 years) |
| Formula for Gratuity Calculation (Not covered under Gratuity Act) | Gratuity Amount = (15 × Last Drawn Salary × Working Tenure) / 30 |
| Example Values | - |
| Last Drawn Salary | Rs 30,000 |
| Working Tenure | 7 years |
| Gratuity Amount Calculation | (15 × 30,000 × 7) / 30 = Rs 1,05,000 |
This Gratuity Calculator is simple to use and can be used as many times as needed.
Step 1: Specify your basic salary and include dearness allowance if applicable, using the sliders
Step 2: Input the total number of years you've been employed with the company.
Step 3: The calculator instantly displays the estimated gratuity amount payable to you based on your input.
1. Informed Planning: Knowing your potential gratuity amount using Suvit gratuity calculator allows you to plan your finances effectively for the future.
2. Understand your Entitlement: Gain clarity on the gratuity calculation formula and ensure you're receiving the rightful amount.
3. Simple and Transparent: The user-friendly interface of Suvit gratuity calculator requires minimal input and provides clear answers, eliminating any complexities.
4. Flexible for Everyone: Whether you're nearing retirement or simply curious about your potential entitlement, the gratuity calculator caters to your needs.
Don't leave your gratuity calculations to the hill. Climb your financial future with the Suvit Gratuity Calculator. Gain clarity on your expected gratuity amount and make informed decisions for a secure tomorrow.
