What is Gratuity?
Employer pays an employee a certain amount in return to the service offered by him to the company is called Gratuity. As per the Payment of Gratuity Act, 1972, an employee should complete 5 years of service in a particular company to become eligible for gratuity claim.
In case an employee disabled due to accident or any disease, can also claim gratuity before completion of 5 years of service. Gratuity is calculated based on the basic salary of the employee and the period of service in a company.
What are the Eligibility Criteria for claiming Gratuity?You must meet the following eligibility criteria:
- You should be eligible for superannuation.
- You should have retired from service.
- You should have resigned after continuous employment of five years with the company.
- In case of your death the gratuity is paid to the nominee, or to you on disablement on account of a sickness or an accident.
What is a Gratuity Calculator?Step by step process to calculate gratuity
Gratuity is basically calculated with the following formula:
(15 * your last drawn salary * tenure of working) / 26.
The gratuity calculator helps you to get the estimated gratuity amount you would receive upon your inputs. This tool is simple to use and useful for the people who wants to know the gratuity amount.
Here is the step to calculate gratuity amount.
1. You must to enter the last withdrawn salary.
2. Enter the number years worked in the organization. (Remember, you must worked minimum of 5 years to claim the gratuity)
3. After entering all the above details, the gratuity amount will be automatically calculated as shown in the below image.
Use this free gratuity calculator tool and know the estimated gratuity that you can claim at the end of your service.