Use the Gratuity calculator to know where you financially stand after employment stops and plan other investments accordingly
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Employees of private companies are eligible to receive amounts for service rendered. These amounts are called “gratuity” and are given to employees after completing five service years of employment. Nonetheless, in case an employee experiences a disability or injury before the completion of five years, gratuity may still be given. According to an employee’s salary, gratuity payment may vary from one employee to another. It is important to know how to calculate gratuity as part of an employee’s income, and this can be done efficiently with an online tool, the gratuity calculator.
Every employee is eligible to get gratuity from the first day of employment. A gratuity calculator serves the purpose of computing a gratuity amount for an employee. This is a digital tool, available online for free use by anyone. The use of a gratuity calculator for you is detailed below:
● It computes the precise sum you are due as gratuity.
● It is free to use and makes calculations simple.
● It saves a lot of time and effort compared to manual calculations.
● It serves the purpose of letting you conveniently plan your finances.
Gratuity is calculated when you have completed five years of employment in a private company. The online calculator for calculating gratuity computes an amount due to any employee by using the last income drawn and the duration of consistent service in the given organisation. It is important to note that the last salary which was drawn is inclusive of the basic drawn salary, any commissions, and the allowance for dearness.
The benefits of using the gratuity calculator are as follows:
● 1. It is a generic, and user-friendly tool, accessible online through most financial portals.
● 2. With a few inputs, your gratuity amount can be computed quickly and effortlessly.
● 3. It is free of any cost.
● 4. You can use it from any smart device.
● 5. It helps you to organise your finances in a planned manner.
Here are some general steps to follow to use the gratuity calculator
● 1. On any financial portal, you will see a tab that says “calculators”.
● 2. Select the “Gratuity Calculator” option.
● 3. Enter the fields requested for, such as the salary (basic), the dearness allowance, etc
● 4. Enter the years of employment with the given company (this should be five or more).
● 5. Press on the “Enter” button and the calculator will go on to do its work.
● 6. The calculator quickly computes the gratuity.
The taxation regulations on gratuity payment are dependent on the employee-type who is due the payment. Taxation on gratuity is detailed below:
● 1. Gratuity payments gained by government employees at any level or post are exempted from tax on gratuity amounts.
● 2. For employees of private companies, gratuity tax has to be paid according to the slab of the employee’s income. In case the income does not fall into a tax slab, then there is no liability to pay tax for gratuity.
An employee is eligible to receive a gratuity payment if the criteria mentioned below are fulfilled
● 1. The employee has to be mandated to get superannuation.
● 2. The employee must have retired from employment.
● 3. The employee must have terminated employment after completing consistent service amounting to five years.
● 4. In the event of the employee’s death, a nominee is paid the gratuity. Furthermore, in case an employee faces disability due to an accident or illness, gratuity may be received by that employee.
An individual who is on a contract for five years or more is on the company payroll, so they will be eligible for gratuity. Nonetheless, if individuals are employed under independent contractors for any service to a particular company, then they would not stand to get any gratuity.
There is an upper limit on gratuity given out by an organisation and this is up to Rs. 20 lakh only. You can easily use the gratuity calculator to compute amounts that you may get as gratuity with limits on payment depending on your years of employment.
All those employees who are due to get gratuity, must hand over an application one month within the date when gratuity may be paid out. Hence, an employee must submit the given application in thirty days of the employment ending. Once an employer receives the gratuity application, the gratuity has to be paid out to the employee within a month.
In case your employer faces bankruptcy, you would still receive gratuity.