SHARE

# Gratuity Calculator

Yr
Total Gratuity Payable : ₹6,92,308

## What does Gratuity mean?

Gratuity is a payment that an organization is required to make to its employees under the Payment of Gratuity Act of 1972.

It serves as a form of appreciation for the employee's contributions to the company. Gratuity is a part of the employee's gross salary and is payable only after they have completed five or more years of service with the company.

## How does Gratuity work?

Gratuity is typically paid by an employer either directly from their own funds or through a gratuity insurance plan with a third-party service provider.

If the employer chooses the latter option, they make annual contributions to the insurance company, which then pays out the gratuity amount to the employee according to the policy guidelines.

An employee generally does not need to contribute towards the gratuity amount, as it is entirely funded by the employer. However, in India, paying gratuity is mandated by law on the completion of 5 years of service.

## What is a Gratuity Calculator?

Gratuity calculator is an online tool that you can use to calculate the gratuity due from your service in the company.

You need to fill in the following details to get things done:

• Monthly salary (Basic + DA): The last withdrawn salary (Basic salary plus Dearness Allowance) from your company.
• Years of employment: Number of years you worked in the company

Based on this couple of details, the gratuity calculator will do the required calculation automatically and show you the final gratuity amount. You can use the INDmoney gratuity calculator to know your gratuity amount accurately.

## How to Use INDmoney Gratuity Calculator?

Using INDmoney gratuity calculator is super easy. You have to follow only two steps to get the gratuity amount:

Step 1: Open INDmoney gratuity calculator online from your smartphone or computer

Step 2: Enter you salary (Basis + DA) and specify the years of service in the company

That’s all! The calculator will show the final gratuity amount instantly.

## How to calculate Gratuity?

Gratuity can be calculated by using a very simple formula:

Gratuity = Number of years of employment x last drawn salary x 15/26

So for example, if an employee has been working for a company for 10 years and the last drawn basic salary including DA is INR 10,000, then the gratuity amount will be:

Gratuity Amount = 10 x 10000 x 15/26 = INR 57,692

Note: The employer is free to provide the employee higher gratuity, but according to the Gratuity Act, the amount cannot exceed Rs. 10 Lakhs. Anything above INR 10 lakhs, the amount is known is ex-gratia, which is a voluntary contribution and not compulsorily imposed by any law.

## Advantages of Using Gratuity Calculator

A gratuity calculator is completely easy-to-use and offers you the following benefits:

• It lets you know the exact gratuity amount that you are eligible to receive from your employer.
• It only requires you to enter your salary and years of service in the company. Based on only these two inputs, the gratuity calculator will show you the final value of gratuity.
• The gratuity calculator saves you from using the complicated gratuity calculation formula 2022. It uses the formula and shows you the gratuity amount instantly.
• If you are planning to continue your service for long, you can use the gratuity calculator to do proper financial planning.

It is necessary to calculate your gratuity in order to claim the full amount that you are entitled to. Knowing this beforehand will help you to plan your finances in a better way. You can use a gratuity calculator for this purpose and know your gratuity value instantly.