1. What is Leave Gratuity?

Leave gratuity is a lump sum payment made by an employer to an employee as a form of gratitude for the services rendered. In India, it's calculated based on the last drawn salary and years of service.

2. How Does the Calculator Work?

The calculator uses the gratuity formula:

Where:

• \( Last Salary \) — The last drawn salary of the employee
• \( \frac{15}{26} \) — Standard multiplier for gratuity calculation
• \( Years of Service \) — Total years of service completed

Explanation: The formula accounts for 15 days' wages for each completed year of service, calculated based on the last drawn salary.

3. Importance of Gratuity Calculation

Details: Accurate gratuity calculation is crucial for ensuring fair compensation for employees upon retirement, resignation, or termination after completing eligible service period.

4. Using the Calculator

Tips: Enter the last drawn salary in dollars and years of service in years. Both values must be valid positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Who is eligible for gratuity payment?
A: Employees who have completed at least 5 years of continuous service with an employer are eligible for gratuity payment.

Q2: Is there a maximum limit for gratuity payment?
A: Yes, the maximum gratuity amount payable is ₹20 lakhs as per the Payment of Gratuity Act, 1972.

Q3: How is the 15/26 multiplier derived?
A: The multiplier represents 15 days' wages out of 26 working days in a month (assuming 4 weeks with 6 working days each).

Q4: What components are included in "last drawn salary"?
A: Last drawn salary typically includes basic salary and dearness allowance, but excludes bonuses, commissions, and other allowances.

Q5: Can gratuity be forfeited?
A: Gratuity can be forfeited partially or fully if an employee's services are terminated for acts of violence, moral turpitude, or riotous behavior.