Any private company employee that offers EPF benefits can receive a gratuity after five years of service. However, an employee may be entitled to the gratuity before the five-year mark if injured and disabled in an accident or due to an illness. Calculator.ai provides you with a free gratuity calculator that you may use to determine how much your organisation owes you. All gratuity payments are subject to the Payment of Gratuity Act 1972. The amount is determined by the last drawn salary and years of work with the organisation.
What is Gratuity?
Gratuity is a lump sum that an employer pays an employee as a token of appreciation for their services towards the company. The Payment of Gratuity Act 1972 governs it and applies to employees who have completed at least five years of continuous service in an organisation.
Importance of a Gratuity Calculator
A Gratuity Calculator is an essential tool for any working professional. It helps you estimate the gratuity you will receive at retirement or resignation. A clear picture of your potential gratuity amount aids in better financial planning. It enables you to understand how much you can expect as a part of your retirement benefits.
How to Use a Gratuity Calculator
Using a Gratuity Calculator is quite simple and involves the following steps:
- Step 1: Enter your last drawn salary (basic salary plus dearness allowance).
- Step 2: Input the total years you have served in the company.
- Step 3: Click on ‘Calculate’.
The calculator will then display the gratuity amount you can receive based on the inputs provided.
Gratuity Calculation Formula
Calculator.ai employs a unique formula, which is compared with similar models, to calculate gratuity. The formula used by our online gratuity calculator is:
G = n*b*15/26
Where:
- n is the years you have been employed at the respective organisation.
- b is your last drawn basic salary and Dearness Allowance (DA).
- G is the gratuity amount you are entitled to.
For instance, if an individual, say A, has been employed with an organisation for five years, and their basic salary plus DA is Rs. 30,000 per month, they would be entitled to a gratuity of
5*30000*15/26 = Rs. 86,538.46
Advantages of Using Gratuity Calculator
As a frontrunner in the financial sector, Calculator.ai offers you the most advanced tools available. Here’s why our Gratuity Calculator is beneficial for you:
- We prioritise data security. Our servers are secure and safe for use.
- Our calculator is user-friendly and doesn’t require any technical skills.
- You can rely on Calculator.ai gratuity calculator for accuracy. It’s a product you can trust.