# How do you calculate Gratuity?

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#### 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

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

Gratuity computation if employee is resigned,terminated or retired
Actual Gratuity Received
Less Exemption under sec 10(10)
1. 1/2*10 months average salary*completed year of service
2. Actual Gratuity received
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

#### sachinlad Profile Answers by sachinlad

• 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

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#### Vaibhav Jain

• Aug 8th, 2011

Is incentive added on basic salary?

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#### 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
= actual amount received

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#### sai krishna

• Dec 14th, 2011

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

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#### 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

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#### Pranali Raut

• Apr 12th, 2012

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

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#### 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?

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#### 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.........

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#### nitin

• Oct 10th, 2012

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

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#### 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

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#### KRISHNA

• Jun 4th, 2014

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

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#### josephat baraza

• Oct 18th, 2016

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

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#### Achirabhadra

• Jan 18th, 2018

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

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