Calculate your gratuity amount as per the Payment of Gratuity Act, 1972.
Gratuity is a statutory benefit paid by an employer to an employee when the employee completes at least 5 years of continuous service and leaves the organization (through resignation, retirement, death, or disablement). It is governed by the Payment of Gratuity Act, 1972, which applies to all establishments employing 10 or more persons.
For employees covered under the Act, the formula is: Gratuity = (Last Basic + DA) × 15/26 × Number of Years of Service. The "15/26" represents 15 working days out of 26 working days in a month. The number of years is rounded up if the last year includes more than 6 months. The maximum gratuity exempt from income tax is ₹20 lakhs (revised from ₹10 lakhs). Any amount exceeding this is added to income and taxed at the applicable slab rate.
For employees not covered under the Act (establishments with fewer than 10 employees), the formula is: Gratuity = (Last Basic + DA) × 15/30 × Years of Service, which uses 30 days per month instead of 26.
Gratuity is a valuable retirement benefit — for someone with a monthly basic+DA of ₹50,000 and 25 years of service, the gratuity amount would be nearly ₹7.2 lakhs, completely tax-free up to ₹20 lakhs. Understanding your entitlement helps you plan better and ensures you receive the correct amount from your employer.
Gratuity is entirely funded by the employer and should be treated as a guaranteed retirement benefit rather than a surprise windfall. Tracking your entitlement helps you plan how much of your overall retirement corpus will come from gratuity versus your own savings in PF, PPF, or investments. For employees who anticipate job changes, note that gratuity is not portable — you receive it separately from each employer you serve for 5+ years, and each period of service is calculated independently. If you resign before 5 years at a company, you forfeit the gratuity for that period entirely, which is an important factor when considering a job change in years 3 or 4 of a role. Employees in seasonal establishments or contract-based roles should verify their specific eligibility with HR or a labour law professional, since the Gratuity Act has nuanced provisions for different categories of workers beyond the standard permanent-employee scenario covered here.
Gratuity एक statutory benefit है जो employer कर्मचारी को तब देता है जब कर्मचारी कम से कम 5 साल की continuous service पूरी करता है और संगठन छोड़ता है (resignation, retirement, मृत्यु, या disability के माध्यम से)। यह Payment of Gratuity Act, 1972 द्वारा governed है, जो 10 या उससे अधिक व्यक्तियों को employ करने वाले सभी establishments पर लागू होता है।
Act के तहत covered employees के लिए formula है: Gratuity = (Last Basic + DA) × 15/26 × Service Years। "15/26" महीने में 26 working days में से 15 working days represent करता है। अगर आखिरी साल में 6 महीने से ज़्यादा है तो years को round up किया जाता है। Income tax से exempt maximum gratuity ₹20 लाख है। इससे अधिक राशि income में जुड़ जाती है और applicable slab rate पर tax लगता है।
Act के तहत covered नहीं employees (10 से कम employees वाले establishments) के लिए formula है: Gratuity = (Last Basic + DA) × 15/30 × Service Years, जो 26 की बजाय 30 days per month इस्तेमाल करता है।
Gratuity एक valuable retirement benefit है — ₹50,000 monthly basic+DA और 25 साल service वाले किसी व्यक्ति के लिए gratuity amount लगभग ₹7.2 लाख होगा, ₹20 लाख तक completely tax-free। अपनी entitlement समझने से आपको बेहतर planning करने और employer से सही amount मिलना सुनिश्चित करने में मदद मिलती है।
Gratuity पूरी तरह employer द्वारा funded होता है और इसे surprise windfall की बजाय guaranteed retirement benefit के रूप में treat किया जाना चाहिए। अपनी entitlement track करने से आपको plan करने में मदद मिलती है कि आपके overall retirement corpus का कितना हिस्सा gratuity से आएगा बनाम PF, PPF, या investments में आपकी own savings से। Job changes की उम्मीद करने वाले employees के लिए ध्यान दें कि gratuity portable नहीं है — आप इसे हर उस employer से अलग-अलग receive करते हैं जिसके यहां 5+ साल काम किया है, और हर service period independently calculate होती है। अगर आप किसी company में 5 साल से पहले resign करते हैं, तो उस period की gratuity पूरी तरह forfeit हो जाती है, जो किसी role के 3 या 4 साल में job change consider करते समय एक important factor है। Seasonal establishments या contract-based roles में employees को HR या labour law professional से अपनी specific eligibility verify करनी चाहिए, क्योंकि Gratuity Act में different categories of workers के लिए nuanced provisions हैं जो यहां covered standard permanent-employee scenario से परे हैं।