Gratuity Calculation Formula: Online Gratuity Calculator to get Gratuity Amount

According to the Payment of Gratuity Act, every organization with an employee number of more than 10 will have to pay gratuity to employees. 

A Gratuity is a lump sum amount that an employee receives from his/her employer after completing his/her service. The contribution towards the gratuity is made solely by the employer. In case the employer chooses to invest in gratuity insurance schemes, the employee has the authority to contribute a part of the insurance premium towards the same. 

You can estimate your gratuity amount by using the gratuity formula. The formula for employees covered under the Payment of Gratuity Act is (15 X monthly salary working tenor) / 26 and the formula for employees not covered under the Payment of Gratuity Act is (15 X monthly salary working tenor)/30. 

The substantial amount received from gratuity can be invested in secured funds like a Fixed Deposit to yield high returns on Investments. 

Recently, the tax-free limit for gratuity has been increased from Rs. 20 Lakh to up to Rs. 30 Lakh. For Government employees (state, central or local), the entire gratuity amount is tax exempted. Private employees are only eligible to pay tax if their income of gratuity crosses the limit of Rs. 30 Lakh. 

Also, Read: Gratuity Calculation, Gratuity Formula, Rules & Eligibility