Gratuity Calculator

5
5
from your ‘Last drawn Salary’

Try Again!

Gratuity Calculator and Gratuity Calculation Formula

Gratuity is calculated based on your monthly Basic Salary and Dearness Allowance (DA). The formula to calculate Gratuity in India is as follows:

Gratuity Amount = (Basic Salary + Dearness Allowance) x (Number of Completed Years of Service) x 15 / 26

Gratuity Calculator : Here’s a breakdown of the components:

  • Basic Salary: This is the fixed component of an employee’s salary and does not include any other allowances, bonuses, or overtime pay.

  • Dearness Allowance (DA): Dearness Allowance is an allowance paid to employees as a cost of living adjustment to account for inflation. It is often a percentage of the basic salary.

  • Number of Completed Years of Service: This is the total number of years and months the employee has worked for the employer. It’s important to note that when calculating the number of completed years, any part of a year that is more than six months is considered a full year, and any part of a year less than six months is not counted.

  • 15/ 26: These are constants used in the formula, where 15 represents the number of days’ wages for each completed year of service, and 26 represents the number of working days in a month.

Example to illustrate the Gratuity calculation:

Suppose an employee has a basic salary of Rs. 30,000 per month, a dearness allowance of 5%, and has completed 5 years and 8 months of service. The gratuity calculation would be as follows:

Gratuity Amount = (30,000 + (5% of 30,000)) x (5 years + 8 months) x 15 / 26

  1. Calculate Dearness Allowance: DA = 0.05 x 30,000 = Rs. 1,500
  2. Calculate Completed Years: Since the employee has completed 5 years and 8 months, this is counted as 6 years (as any part of a year more than six months is rounded up to a full year).
  3. Calculate Gratuity: Gratuity Amount = (30,000 + 1,500) x 6 x 15 / 26 = Rs. 80,769.23

So, in this example, the gratuity amount for the employee would be Rs. 80,769.23.

Please note that gratuity calculations in India may vary depending on the specific terms of employment, and it’s essential to consult with the employer or refer to the company’s gratuity policy for accurate calculations.