Gratuity Calculations: What will be gratuity for employee with Rs 60,000, Rs 80,000, and Rs 1,00,000 as last-drawn basic pay and 28 years of service?

The government rewards its employee for their long-term service in the form of gratuity. However, in order to get gratuity, they must have completed interrupted service of 5 years.

Earlier, the maximum gratuity limit was Rs 20 lakh, but the central government increased it to Rs 25 lakh with effect from January 1, 2024. There is no minimum limit for gratuity.

For a retiree, gratuity is calculated on the basis of one-fourth of a month’s basic pay and dearness allowance (DA) drawn on the date of retirement for each completed six-month period of qualifying service. 

Gratuity= (BP+DA)XService half yearsX1/4, where BP is last-drawn basic pay and DA is dearness allowance

There is no minimum service duration condition for death gratuity. A deceased's heir or family members are eligible to get the death gratuity. The amount depends on the years of the deceased employee's service. For less than 2 years of qualifying service, it will be 2 times of the basic pay. 

For 1 year or more but less than 5 years of qualifying service, it will be 6 times of the basic pay.  For 5 years or more but less than 11 years of qualifying service, it will be 12 times of the basic pay.  For 11 years or more but less than 20 years of qualifying service, it will be 20 times of the basic pay. 

For 20 years or more of qualifying service, it will be half of emoluments for every completed 6 monthly period of qualifying service subject to a maximum of 33 times of emoluments.

If the government employee's service is less than 10 years, they are not eligible to get a pension under Old Pension Scheme (OPS), but in that condition, they are entitled to get service gratuity. 

The amount will be the last-drawn half month’s basic pay plus DA for each completed 6 monthly period of qualifying service. This gratuity amount is distinct from retirement gratuity and is paid over and above retirement gratuity.

The gratuity amount doesn't depend on the pension system you choose. The gratuity amount calculation will be the same for employees following Old Pension Scheme (OPS), National Pension System (NPS), and Unified Pension Scheme (UPS).

We will calculate gratuity amounts for government employees with last-drawn basic pay of Rs 60,000, Rs 80,000, and Rs 1,00,000, and 28 years of service. We will calculate gratuity at the current DA rate of 53 per cent.

The estimated gratuity for such an employee will be Rs 12,85,200.

The estimated gratuity for a person with Rs 80,000 as last-drawn basic pay will be Rs 17,13,600.

The estimated gratuity for such an employee will be Rs 21,42,000.