Calculate statutory gratuity payout payable by employers under the Payment of Gratuity Act.
Gratuity is a monetary amount paid by an employer to an employee for services rendered continuously for 5 years or more. It is governed by the Payment of Gratuity Act, 1972.
Gratuity is calculated as: Gratuity = (15 × Last Drawn Salary × Tenure) / 26, where salary includes Basic Salary + Dearness Allowance (DA).
Yes, continuous service of 5 years is mandatory to be eligible for gratuity, except in cases of employee death or disablement.
In India, gratuity up to ₹20 Lakhs received by non-government employees covered under the Act is exempt from income tax.
If service exceeds 6 months in a year (e.g. 5 years 7 months), it is rounded off to the next full year (i.e. 6 years).
Yes, gratuity received by government employees (Central, State, or Local Authority) is entirely tax-exempt without caps.