Calculate your gratuity payout when leaving a job based on the Payment of Gratuity Act.
Do not include HRA, Special Allowances, or bonuses.
Gratuity is a monetary benefit paid by an employer to an employee at the time of retirement or leaving the job, provided the employee has completed at least 5 years of continuous service.
The standard formula under the Payment of Gratuity Act is: (15 × Last drawn Basic Salary & DA × Number of completed years of service) ÷ 26.
Gratuity is completely tax-free up to ₹20 Lakhs during your entire working lifetime. Any amount received above ₹20 Lakhs is taxable as per your income slab.
Under the Act, if you work for more than 6 months in your final year, it is rounded up to a full year. So 4 years and 7 months equals 5 years, making you eligible!