After five years of employment, any private company employee offering EPF benefits can receive a gratuity. However, if an employee is hurt and rendered disabled in an accident or due to a sickness, they are entitled to receive the gratuity before the five-year mark. The gratuity calculator on the HR HUB will help you determine how much your employer owes you. The provisions of the Payment of Gratuity Act of 1972 apply to all gratuity payments. The years of employment with the company are added to the most recent salary to arrive at the total.
To determine eligibility for a gratuity, you must first determine how much you can receive. Our online gratuity calculator might also help you in that area.
HR HUB bases its own formula on comparisons to other comparable products. We use this formula to calculate gratuity online:
G = n*b*15/26
In the formula, the values are the following.
| N/n | The number of years you have worked in the concerned organisation |
| B/b | Last drawn basic salary plus Dearness Allowance (DA) |
| G | Gratuity amount you are eligible for |
For instance, if employee A has worked for an organization for five years and their monthly basic pay, along with DA is Rs. 30,000, they are qualified to earn a gratuity of 5 * 30000 * 15/26 = Rs. 86,538.46.
Keep in mind that under the current laws –
Your gratuity cannot exceed Rs. 10 Lakh. Ex gratia payment is the term for any sum exceeding this maximum.
Note: The sum amount is rounded to the nearest whole number, 38, if you have worked, for example, 37 years and 6 months.
The gratuity entitlement is generally specified by the Payment of Gratuity Act of 1972.
You are about to enter your superannuation years.
The same employer has employed you for the last five years on a steady basis.
There isn't another full-time job that you work for.
In these situations, an online tip calculator in India is helpful because -
It assists you in determining the exact amount owed to you.
You save a lot of money and other resources by doing this.
It is available for use from the convenience of your home.
It supports your long-term budgetary planning.
To utilize the retirement gratuity calculator, just follow these easy steps.
Step 1: Have all the information you need about your past jobs close at hand.
Step 2: The gratuity amount will be displayed in seconds once you enter the base pay plus dearness allowance value.
HR HUB, a global leader in financial affairs, provides the most advanced tools available. Here are some reasons why you should use our gratuity calculator.
The security of data is critical. Our servers are safe and secure.
You don't need to be technical to use our calculator because it is simple.
The gratuity calculation on HR Hub is always accurate. You can rely on our merchandise.
The type of employment determines whether taxes apply to the gratuity amount.
Any sum that a government employee receives in gratuities is not subject to income tax.
If the employer is covered by the Payment of Gratuity Act, the lower of the following three amounts will be free from income tax for workers in the private sector:
Twenty lakh rupees.
The amount that was gratuities.
The appropriate tip.
The employees are only entitled to a maximum tax-exempt gratuity of Rs 20 lakh during their employment within the organization.
Employees are eligible for gratuity if they have completed at least 5 years of continuous service with the same employer. However, gratuity is also payable on retirement, resignation, death, or disablement due to accident or disease, regardless of the tenure.
As per the Payment of Gratuity Act, 1972, the maximum gratuity amount payable is ₹20 lakhs. This limit can be revised by the government from time to time.
For employees with varying salary structures, gratuity is calculated based on the average salary drawn over a specified period before leaving the job. The last drawn salary used in the formula typically includes basic salary and dearness allowance.
The formula to calculate the gratuity of an employee is as follows:
Gratuity = Last drawn salary X (15/26) X Number of years of service
Gratuity received by an employee is tax-free up to a certain limit, which is currently ₹20 lakhs as per the Income Tax Act. Any amount received beyond this limit is subject to tax as per the applicable tax slab of the employee.
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