Calculate your gratuity.
A gratuity calculator is a tool that may be used to predict the amount of gratuity one would get if they decide to quit their employment. It's a useful tool for employees who are preparing to leave their current position. The gratuity calculator is based on a formula with many inputs. Last-drawn monthly income, years of service (including months), and dearness allowance are among them. The calculator is simple to use and delivers the gratuity amount in a matter of seconds. It's free to use as many times as you like. The calculator also assists with long-term financial planning for a stress-free retirement.
Gratuity Calculation Formula
The Payment of Gratuity Act, 1972, prescribes the rules and calculation of the Gratuity Amount. The Act classifies the employees under two categories:
Category 1: Employees covered under the Act
Category 2: Employees not covered under the Act
The above-mentioned categories apply to both private and government employees. However, for government employees, the pay structure varies and hence has additional heads to be accounted for.
Frequently Asked Questions
The upper limit for payment of Gratuity is Rs. 20 lacs for government employees and Rs. 10 lacs for non-Government employees.
Only individuals who have completed 5 years of service with an organisation are eligible for Gratuity. However, Gratuity is typically paid at the time of retirement and at the time of leaving the employment. the Gratuity may also be paid in the event of unforeseen circumstances such as the death of an employee.
With the recent amendment, the amount of Gratuity is tax-free up to Rs.20 lakh, as opposed to the previous limit of Rs.10 lakh set by Section 10(10) of the Income Tax Act.