Enter the gratuity amount, last drawn salary, and the number of completed years of service into the calculator to determine the missing variable.
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Gratuity Formula
The following formula is used to calculate the gratuity amount for a given last drawn salary and number of completed years of service.
G = (S * Y * 15) / 26
Variables:
- G is the gratuity amount
- S is the last drawn salary
- Y is the number of completed years of service
To calculate the gratuity amount, multiply the last drawn salary by the number of completed years of service and then multiply by 15. Divide the result by 26 to get the gratuity amount.
What is Gratuity?
Gratuity is a lump sum payment made by an employer to an employee as a token of appreciation for the services rendered by the employee. It is typically given at the time of retirement or when the employee leaves the organization after completing a certain number of years of service. The gratuity amount is calculated based on the last drawn salary and the number of completed years of service. It serves as a financial benefit to support the employee after their tenure with the organization.
How to Calculate Gratuity?
The following steps outline how to calculate the Gratuity.
- First, determine the last drawn salary (S).
- Next, determine the number of completed years of service (Y).
- Next, calculate the gratuity amount using the formula G = (S * Y * 15) / 26.
- Finally, calculate the Gratuity.
- After inserting the values and calculating the result, check your answer with the calculator above.
Example Problem :
Use the following variables as an example problem to test your knowledge.
Last drawn salary (S) = 50,000
Number of completed years of service (Y) = 10