Gratuity Calculator - Calculate Your Gratuity Payout Instantly

Gratuity is a lump-sum payment made by an employer to an employee as a reward for sustained service. It is typically paid at the time of retirement, resignation, termination, or death. It is distinct from regular salary or bonus and is calculated based on the employee's last drawn salary and total years of qualifying service. Gratuity is recognised as an employee benefit in employment law and HR policy across many countries globally.

Gratuity is calculated using the standard formula: Gratuity Amount = (Last Drawn Monthly Basic Salary / 26) x 15 x Number of Years of Service. The divisor 26 represents standard working days per month, and 15 represents the number of days of gratuity earned per year of service. Our free Gratuity Calculator applies this formula automatically - enter the salary and service dates to get an instant result.

Under the most widely applied standard HR convention, an employee must complete a minimum of five (5) continuous years of service with the same employer to be eligible for gratuity. Some employer policies or local employment laws may specify a different minimum threshold. This calculator uses five years as the default but allows users to adjust the minimum service field as needed.

Yes. The NextinHR Gratuity Calculator is 100% free. No registration, no credit card, and no hidden fees. You can calculate gratuity for any employee in any currency, with no usage limits.

Gratuity is typically calculated on the basic salary only, or on basic salary plus fixed dearness allowance (DA) where DA is a contractual fixed component. Variable pay, performance bonuses, house rent allowance, special allowances, and overtime pay are not included in the gratuity base under the standard formula.

The standard rounding convention used in HR practice is: if the final year of service includes six months or more, it is rounded up to the next full year; if less than six months, it is ignored. This calculator supports three modes - round down (floor), round up (standard), and exact pro-rated calculation - and defaults to the round-up standard mode.

The taxability of gratuity depends on the applicable tax laws in your jurisdiction. Many countries provide a tax exemption on gratuity payments up to a specified ceiling amount, with any amount above the ceiling taxable as income. This calculator does not apply jurisdiction-specific tax rules. Consult a qualified tax advisor or HR compliance specialist to determine the tax treatment of any gratuity payment.

In most jurisdictions and under standard HR policy, an employee who is terminated by the employer is entitled to receive their gratuity payout if they have completed the minimum qualifying period of service, regardless of the reason for termination (unless termination was due to misconduct under specific provisions). If termination occurs before the minimum service threshold is met, gratuity is typically not payable. Always verify applicable local employment law.

Yes. This calculator supports over 20 global currencies including USD, EUR, GBP, AED, SAR, SGD, AUD, CAD, INR, and more. Select your preferred currency from the dropdown before entering the salary details. The gratuity amount will be calculated and displayed in the selected currency.

Gratuity and provident fund are both long-term employee benefits, but they operate differently. Gratuity is a one-time lump-sum payment made entirely by the employer at the time of separation, calculated based on salary and years of service. Provident fund is a retirement savings scheme where both the employer and employee contribute a percentage of salary each month, and the accumulated corpus is paid out at retirement or separation. Gratuity does not involve employee contributions.