# How do you calculate Gratuity?

#### sunjas_man02 Profile Answers by sunjas_man02

• Nov 29th, 2007

hello friends,

to calculate the gratuity: it has the formula

first we can calculate for one year.

Ex. One year Gratuity= Basic+D.A.   X 15
26

This is the formula to calculate the gratuity.

#### chintamani Profile Answers by chintamani

• Jun 1st, 2008

Gratuity is computed as below:
under Payment Act:
Under Sec 10(10) of IT Act

Less Exemption under sec 10(10)
1. 15/26*completed year of service*10 months average salary
3.Max 350000
Among these which is least is eligible for exemption

Gratuity computation if employee is resigned,terminated or retired
Less Exemption under sec 10(10)
1. 1/2*10 months average salary*completed year of service
3.Max 350000
Among these which is least is eligible for exemption

#### Sachin P. Jawalekar Profile Answers by Sachin P. Jawalekar

• Dec 22nd, 2008

hello friends,

to calculate the gratuity: it has the formula

first we can calculate for one year.

Ex. One year Gratuity= Basic+D.A.   X 15
26

This is the formula to calculate the gratuity

Sachin P. Jawalekar

• Sep 16th, 2009

Gratuity Calculation :

Gratuity=Last Basic Pay*15 Days* Number of Year Service
-------------------------------------------------------------
26 Days

#### Vijayakumar Borra Profile Answers by Vijayakumar Borra

• Jun 4th, 2011

Basic+DA

26 - Working Days

15 - Half of the month

No.of Years

Basic+DA/26*15*No.of Years

#### Vaibhav Jain

• Aug 8th, 2011

Is incentive added on basic salary?

#### Shruti Jain

• Oct 17th, 2011

Cover under Gratuity act 1972
Least amount will be exempt

=15/26*last basic pay* no of years service
*no of years service= year + more than 6 month will count as 1 year
= 10 months average salary
*salary= basic+ DA
= 100000 Lacs

#### sai krishna

• Dec 14th, 2011

Gratuity= Last Basic Pay*15 Days
-------------------------------------------------------------
Number of Year Service* 26 Days

#### tejbhan pandey

• Mar 21st, 2012

last basic+D.A*15*no of year of service /26
more than 6 month of service is calculated as next year
less than six month of service is calculated as previous year
like: 5 year 8 month will be treated as 6 year

#### Pranali Raut

• Apr 12th, 2012

Last drawn Salary * 15 days / 26 days * no of years

#### bharat ahir

• Jul 12th, 2012

if the employee completed 4 years 4 month any 17 day and he is leaving the company is he eligible for gratuity?

#### venkkatish.ps

• Aug 7th, 2012

If company is registered under gratuity act 1972 then formula is " last drawn basic salary*15/30 * no of years served....if its not registered then formula is " last drawn basic salary*15/26*no of years served."..........Note: Ee should serve for minimum 5 years and years in which minimum 240 working days are there, such years are only considered.........for eg: he served for 5 years but only in 3 years he or she has worked for min 240 days, then instead of 5 years, we consider as 3 years in formula.......upto 10 lakhs there is no tax for gratuity.........

#### nitin

• Oct 10th, 2012

no he is not eligible the eligibility criteria for gratuity is 5 years

#### Monalisa

• Aug 7th, 2013

Gratuity is paid to all such employees after their resignation or retirement.Incase of resignation gratuity is paid to such employees who have completed 5 years of service.

Calculation of gratuity-Basic+DA*15/26*Total no. yrs service

15- Half month
26- Excluding 4 sundays

#### KRISHNA

• Jun 4th, 2014

GRATUITY=((BASIC+DA)/26)*15*YEARS OF WORKING

#### josephat baraza

• Oct 18th, 2016

Gratuity = Year of Service x Last Basic Pay x 4%

• Jan 18th, 2018

Basic*15/26*no of years.. emp have to work for more than 5 years .

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