# Gratuity Calculation in India with Examples

Every salaried person who works for 5 years or more in an organization is eligible for Gratuity. Here are two simple examples for you to understand the gratuity calculation better. The Gratuity calculation is based on the basic pay and Dearness allowance and the number of years served.

#### Example 1:

Let us consider the problem : An employee of India earns a basic pay of Rs.15000 with Dearness Allowance (D.A) as Rs. 3000 and having 6 years of service.

###### Solution:

We can calculate the Gratuity using the given formula.

#### Formula :

Gratuity Calculation= [ (Basic Pay + D.A) x 15 days x No. of years of service ] / 26 Where, D.A = Dearness Allowance. End of Service Benefits Eligibility : 1. Any person employed on wages/salary. 2. At the time of retirement or resignation or on superannuation, an employee should have rendered continuous service of not less than five years. 3. Payable without completion of five years only when death and disablement.

Substituting the values in the formula,

Gratuity Calculation in India = [ (15,000 + 3,000) x 15 days x 6 ] / 26

Therefore, the value of Gratuity is Rs. 62307.69.

#### Example 2:

Let us consider the problem : An employee of India earns a basic pay of Rs.50000 with Dearness Allowance (D.A) as Rs.8000 having 5 years of service.

###### Solution:

Substituting the values in the formula,

Gratuity Calculation in India = [ (50,000 + 8,000) x 15 days x 5 ] / 26

Therefore, the value of Gratuity is Rs. 167307.69.