Gratuity Calculator

A gratuity calculator is a helpful tool for employees to estimate the amount they are entitled to receive when they leave their jobs. This benefit, provided by employers to reward long-term service, is calculated using a specific formula that considers factors like the employee's basic salary, years of service, and last drawn salary.
By inputting these details, a gratuity calculator simplifies this complex process, making it easier for employees to estimate their benefits. KreditBee's gratuity calculator stands out by providing accurate and reliable results, ensuring that employees can confidently plan their finances based on precise calculations.
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What is Gratuity?

Gratuity is a one-time payment for employees when they exit a company, typically after completing five years of continuous service. This benefit, which forms part of the retirement package, is regulated by the Payment of Gratuity Act of 1972 in India. This legislation outlines the guidelines and conditions for gratuity payments, ensuring employees receive this financial reward after a minimum of five years of service.

How Does KreditBee's Gratuity Calculator Work?

Our online gratuity calculator is a practical tool for estimating the amount you'll receive upon leaving a job, provided you have served continuously for five years. It uses the gratuity calculation formula to determine your gratuity amount based on inputs such as your last drawn salary and tenure with the company. For instance, public sector employees can use a government gratuity calculator in India to determine the accurate amount as per the perks they receive.

How to Calculate Home Loan Eligibility

Calculating your home loan eligibility doesn't have to be complicated. While lenders use detailed formulas, you can get a good estimate by considering a few key factors:

  1. Income:
    Your monthly income is a primary factor. Lenders typically allow you to borrow a multiple of your income, usually around 40-60 times your monthly salary.

  2. Existing EMIs:
    If you have other loan payments, they will impact your eligible loan amount. Lenders usually limit your total EMIs (including the potential home loan EMI) to 40-50% of your monthly income.

  3. Credit Score:
    A higher credit score indicates better creditworthiness, making you eligible for a larger loan and potentially lower interest rates.

  4. Loan Tenure:
    A longer tenure means lower EMIs but higher overall interest paid. Choose a tenure that balances affordability with the total loan cost.

  5. Property Value and LTV Ratio:
    Lenders usually finance up to 80-90% of the property value. The loan-to-value (LTV) ratio plays a crucial role in determining your loan amount.

KreditBee's home loan eligibility calculator allows you to easily input these details and get an instant estimate. While this provides a good starting point, remember that the final loan amount may vary based on the lender's assessment and policies.

Formula to Calculate Gratuity

The gratuity formula in India includes your basic salary, dearness allowance, and any commissions earned. Our gratuity calculator for private employees simplifies the gratuity amount calculation by providing results in seconds.
It is an easy-to-use tool that can be employed repeatedly to forecast your potential gratuity, aiding in financial planning during retirement or job transitions.
The Payment of Gratuity Act 1972 sets out the regulations and formula for calculating gratuity payments. It classifies employees into two categories:
Category 1: Employees Covered by the Gratuity Act
For employees under the Gratuity Act, gratuity is calculated using this formula:
Gratuity (G) = n × b × 15 / 26
In this equation, n represents the number of completed years of service, and b is the last-drawn salary, including dearness allowance. The calculation is based on 15 days of salary for each year of service. For example, if Ms Naina has worked at ABC Pvt. Ltd. for 10 years and 2 months with a current salary of Rs. 200,000, her gratuity would be:
Gratuity = 200,000 × 10 × (15 / 26) = Rs. 11,56,154
Category 2: Employees Not Covered by the Gratuity Act
Employees at organisations not covered by the Act receive gratuity calculated using:
Gratuity (G) = n × b × 15 / 30
Here, n is the number of completed years, and b is the last-drawn salary. For example, Mr. Patel, who has worked at XYZ Pvt. Ltd. for 5 years and 9 months with a salary of Rs. 75,000, would receive:
Gratuity = 75,000 × 5 × (15 / 30) = Rs. 220,240
For employees in this category, the tenure is counted as complete years, so Mr Patel's 10 years and 9 months of service would be rounded to 10 years.
These categories apply to both private and public sector workers. However, it's important to note that the pay structure for government employees may differ from that of private sector employees.
Gratuity is calculated based on 26 working days per month and computed at a rate of 15 days of wages for each year of service.

Use KreditBee’s Gratuity Calculator

KreditBee's Gratuity Calculator provides precise and instant results to help you plan your financial future. Its user-friendly design ensures a seamless experience, making complex calculations simple. Trust KreditBee's tool to give you an accurate estimate of your gratuity, aiding in effective retirement planning.

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