Calculate your exact gratuity entitlement on resignation, retirement or death/disablement. Covers both Payment of Gratuity Act companies and non-covered employers.
Gratuity is a statutory benefit paid to employees as a token of appreciation for their long service. Governed by the Payment of Gratuity Act, 1972, it applies to all establishments with 10 or more employees. Understanding your gratuity entitlement is essential before resigning, retiring, or when your employer is acquired.
The number 15 represents 15 days of salary per year of service. The number 26 represents working days in a month (excluding Sundays). So effectively, you earn half a month's salary as gratuity for each year of service.
No. Gratuity is calculated only on Basic Salary + Dearness Allowance (DA). HRA, LTA, medical allowances, special allowances, and performance bonuses are excluded from the gratuity computation.
The employer must pay gratuity within 30 days of the amount becoming payable. If delayed beyond 30 days, the employer is liable to pay simple interest from the due date. Failure to pay is a criminal offence under the Act.
Yes, if you change jobs after completing 5 years with an employer, you are entitled to gratuity from that employer. Your new employer starts fresh — there is no transfer of gratuity entitlement between employers unless specifically agreed upon.
Gratuity is a statutory benefit paid by employers to employees completing 5+ years of continuous service. It is calculated as 15 days of last drawn basic salary for each year of service. Gratuity is partially or fully tax-exempt — up to ₹20 lakh is tax-free for most employees, making it a valuable component of your total compensation.
Employees who have completed at least 5 continuous years of service with the same employer are eligible for gratuity under the Payment of Gratuity Act, 1972. The Act applies to establishments with 10 or more employees.
Gratuity = (Basic + DA) × 15/26 × Years of Service. For workers paid on weekly wages, a slightly different formula applies. Years of service: any period over 6 months in the last year counts as a full year.
For private sector employees: gratuity up to ₹20 lakh is exempt from income tax under Section 10(10) of the Income Tax Act. Amount above ₹20L is added to income and taxed at slab rate. For government employees: entire gratuity is tax-free.
You can file a complaint with the Controlling Authority (Labour Commissioner) in your district under Section 8 of the Payment of Gratuity Act. Employer can face a fine up to ₹1 lakh and imprisonment up to 1 year for non-payment. Send a formal written demand first.
Gratuity can be forfeited (fully or partially) only if employment is terminated for willful omission or negligence causing damage/loss to property, or for moral turpitude offences. Voluntary resignation after 5 years does not affect gratuity eligibility.
Gratuity is calculated on basic salary + Dearness Allowance (DA) only — not on CTC, gross salary, HRA, or other allowances. Employers who structure CTC with a very low basic salary pay less gratuity — check your salary structure carefully.
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