Gratuity Calculator: Calculate Gratuity Amount Instantly Online
If you want to know how much you will receive as compensation, then a gratuity calculator is a must for you. It will help you estimate the amount of money you will receive after working for 5 or more years at an organisation or if you were injured in an accident.
This article will look at the gratuity calculation formula and the process for its analysis.
Let’s get started!
What is Gratuity?
Gratuity is a sum of money that you receive from the organisation you work for as a token of appreciation. Payment of gratuity is regulated under the Payment of Gratuity Act 1972.
Gratuity is typically paid after a period of 5 or more years.
Moreover, gratuity works like this: It can be paid directly from the employer’s account or the employer can opt for a general gratuity insurance plan with any service provider.
What Is a Gratuity Calculator?
A gratuity calculator is a valuable tool that helps you know how much compensation you will receive after certain number of years of service with a certain monthly basic salary plus dearness allowance. There are plenty of gratuity calculators online, and you can check ours out below.
What Is the Formula of Gratuity Calculation?
The gratuity calculator uses a basic formula which is –
Gratuity = N*B* 15/26
Number of years an employee has worked in a single organisation
Last basic salary, including the DA
Here is a simple example to help you understand the calculation process better.
Example of Gratuity Amount Calculation
N (Number of years an employee has worked in a single organisation)
B (Last basic salary, including the DA)
Gratuity = 10* 20,000 *15/26
What Are the Benefits of Using a Gratuity Calculator?
These are the benefits of the gratuity calculator -
- The compensation calculator shows how to calculate gratuity in India.
- It helps save time.
- You can perform financial planning for your future.
Things to Consider While Using Gratuity Calculator
Here are some things to keep in mind while using a gratuity calculator.
- The upper limit of the gratuity is ten lakhs in its entirety. Anything you receive above this is called ex gratia or a bonus.
- Also, if you have worked for 15 years and 7 months, it will be rounded off to the next highest year.
- Central government gratuity calculator, gratuity calculator for private employees, pension gratuity calculator, and salary gratuity calculator, are all the same.
In conclusion, use our gratuity calculator to figure out how much you will receive after your years of service!