Gratuity Calculation: What will be your gratuity for Rs 55,000, Rs 75,000, and Rs 95,000 last-drawn salary after 9 years and 4 months of service?

Gratuity is a retirement, resignation or early retirement benefit paid to employees who've completed at least 5 years of continuous service. It’s governed by the Payment of Gratuity Act, 1972. Employees in organisations with 10 or more people are entitled to this payout.

You are eligible to receive gratuity under these conditions:

After retirement On resignation post 5 years of service On superannuation In case of death or disability during service (no 5-year condition in such cases)

Any service exceeding 6 months is rounded off to a full year. For instance, 9 years and 4 months will be treated as 9 years, while 9 years and 6 months will be rounded to 10 years.

Here’s the standard formula: Gratuity = (Last Drawn Salary × Years of Service × 15) / 26

15 = 15 days’ wage

26 = Number of working days in a month excluding Sundays

For a basic salary of Rs 55,000 with 9 years and 4 months of service (rounded to 9 years): Gratuity = (55,000 × 9 × 15) / 26 = Rs 2,85,576

For a basic salary of Rs 75,000 and 9 years of service: Gratuity = (75,000 × 9 × 15) / 26 = Rs 3,89,423

With a last-drawn basic of Rs 95,000 and 9 years of service: Gratuity = (95,000 × 9 × 15) / 26 = Rs 4,93,269

No. If a company falls under the Gratuity Act, it’s legally bound to pay gratuity. Opting out is not allowed, making it a mandatory post-employment benefit.