Anyone can use this online Gratuity Calculator that helps in calculating their gratuity in advance. This is a very easy tool ready to calculate the gross salary and it is free of charge. To calculate the salary one has to provide few details about the Basic Sal.
What is Gratuity?
Gratuity is a component and most of the people do not have known about it. Gratuity is a part of salary paid by the employer in return for the services offered to the company. It is a retirement benefit and social benefit received by the employee while they leave their job. Gratuity is given to the government employees and private sector people, it a tax-free. An employee is eligible for gratuity only when he or she completes 5years of service or full-time services with the same employer.
This tool will help you in estimating how much gratuity you will get when you retire. Gratuity is paid if he had paid in the same company for more than 5 years.
How to calculate Gratuity calculator
Here are some of the steps followed to calculate the salary by using Gratuity calculator
Your basic salary
Basic salary is the amount paid to any employee before any extras are added or taken off, such as reductions because of salary sacrifice schemes that increase the salary due to working at overtime. Allowances like the internet for home-based workers or presents to phone usage are also added to the basic salary.
You’re Dearness Allowance
Dearness allowances are the allowances given by the government to public sector employees as well as the pensioners at the same time. Dearness Allowances is a component of basic salary which is applicable only to the employees in India and Bangladesh.
Number of Years/months in service
How many years and months are worked for the same company are calculated in the below box and more than five years should work for a company.Sponsored Links:
The formula for Calculation of Gratuity Amount
You can see the formula that is listed below is the components that help into the calculation of Gratuity amount. The amount is dependent on the years served in the company and the last drawn salary.
N= Number of years of service in a company.
B= last drawn basic salary plus DA.
Let us consider that an employee of India earns a basic pay of Rs. 50000 with Dearness Allowance (D.A) as Rs.8000 having 5 years of service
We need to substitute the values in the formula,
Gratuity = N*b*15/26
Gratuity Calculation in India = [(50,000 + 8,000) x 15 days x 5] / 26
Therefore, the value of Gratuity is Rs. 167307.69