Calculate Payable Gratuity Amount Online

Seep Gupta
Seep Gupta at July 24, 2022
Calculate Payable Gratuity Amount Online

Gratuity Calculator Online

Gratuity usually refers to the amount that is payable to an employee of a company or an organisation. It is paid to an employee in return for services offered by him to the company. Only those employees who have been employed for five or more than five years by the company are eligible to get gratuity. Gratuity is governed by the Payment of Gratuity Act, 1972.

However, there are some exceptions out there to five years rule. Employees can get gratuity by their company before five years if she/he gets disabled in an accident or due to some disease. Gratuity mainly depends on the last drawn salary by an employee and the number of years of service an employee has worked for the particular company.

Pre-Requisites or Eligibility Criteria for Payment of Gratuity

If an employee of a company or an organisation wants to receive gratuity, he or she must meet the following criteria. These pre-requisites and points are summarised below:-

  • To receive the gratuity payment, an employee should be eligible for superannuation.
  • One should have retired from service.
  • One should have resigned after continuous employment of five years for that specific company.
  • In case of the death of an employee, payment of gratuity is made to the nominee or to that employee on disablement, physical impairment and on account of sickness or an accident.

Gratuity Calculator Online

A gratuity calculator is a type of online calculator tool that calculates the gratuity amount based on the formula for calculating the gratuity. It also gives an estimated amount that one would receive if she or she will quit that particular job, after rendering five years of service. It’s a convenient easy-to-use tool that calculates the gratuity on retirement from the company.

Gratuity Calculator Formula

There’s a formula for calculating the amount of payment of gratuity. It is given below:-

( 15 X Your Last Drawn Salary X Tenure of Working) / 26

For calculating the gratuity amount, one must enter the inputs of the last drawn salary and the tenure of continuous service with the company. The last drawn salary of an employee includes one’s basic salary, the dearness allowance and the commission that you have received from sales.

The gratuity calculator online is a very simple, free, and easy tool. It shows the amount of payable gratuity in a fraction of seconds. It is effortless to use and there’s no limit to it. One can use this gratuity calculator for n number of times.

Taxation Rules for Gratuity

The amount of tax, one needs to pay on the amount of gratuity depends on the type of employee who has to receive the gratuity.

  • The gratuity amount received by a government employee doesn’t matter whether he or she is a central, state, or local employee who is exempted from the income tax.
  • Any other eligible private employee whose gratuity amount is covered under the Payment of Gratuity Act. However, the following three amounts will be exempted from income tax:-
  1. Rs 20 Lakhs
  2. The actual amount of gratuity received
  3. The eligible gratuity

Benefits of Using Gratuity Calculator Online

The gratuity online calculator is an easy-to-use generic tool that holds the ability to calculate the gratuity amount with certainty. There are the following advantages of using a gratuity online calculator. These are given below:-

  • It’s a very convenient tool which calculates the gratuity amount in a fraction of seconds.
  • It gives you an estimate of the gratuity amount that you would receive after five or more years of continuous service.
  • A gratuity calculator also helps in planning your finances in advance by investing the gratuity in a smart and rightful manner to reap maximum returns.
  • One can use a gratuity calculator online nearly anywhere to get the pragmatic gratuity amount.
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