Gratutiy Calculation Test 2026

Gratuity calculation Test
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Payment of Gratuity:Here you can find Gratuity calculation Test.

Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, under the following circumstances:Gratuity calculation Test
  • (a) On his superannuation;
  • (b) On his retirement or resignation; or
  • (c) On his death or disablement due to accident or disease.
  • Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement.
 

Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs. Where any such nominee or heir is a minor, the share of such minor shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.Gratuity calculation Test is a free Online test.Gratuity calculation Test

 

Calculation of Gratutity:
n the Calculation Gratuity , Basic pay + D.A is treated as Last pay Drawn.
Minimum Service required to get Gratuity is 5 years.
While calculating Gratutiy ,Service will be converted to Half years.
If Employee died before 1 year of servcie,then his Service is treated as 3 years.
If Employee died after 3 year of servcie,then his Service is treated as 9 years.
If Employee died after 5 year of servcie,then his Service is treated as 18 years.

You can check your preparation using this Gratuity calculation Test.Gratuity calculation Test

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Gratuity is calculated using the formula: (Last Drawn Salary × 1/4× Number of Years of Service in Half Years) for employers covered by the Payment of Gratuity Act, where ‘Last Drawn Salary’ includes basic pay plus Dearness Allowance, and ‘Number of Years’ is rounded up if service exceeds 6 months in the final year. For employers not covered, the formula is similar but uses 30 working days instead of 26: (Last Drawn Salary × 15/30 × Number of Years of Service).

Example: Straightforward calculation

Employee’s details:

  • Last emoluments = ₹60,000 per month

  • Qualifying service = 30 years 7 months

Step 1: Convert service into six-monthly periods

For 30 complete years:

30 × 2 = 60 six-monthly periods

Remaining service = 7 months

Since 7 months contains another completed six-monthly period:

60 + 1 = 61 periods

So: Six-monthly periods = 61

Step 2: Calculate 1/4 of emoluments

₹60,000 ÷ 4= ₹15,000

Step 3: Multiply by six-monthly periods

₹15,000 × 61= ₹9,15,000

Therefore, the calculated retirement gratuity = ₹9,15,000, before applying the other prescribed limits.

Step 4: Check the 16½-month limit

₹60,000 × 16.5= ₹9,90,000

Compare:

  • Formula amount=₹9,15,000

  • 16½ months’ emoluments = ₹9,90,000

So the formula amount is lower.

Result: ₹9,15,000, subject to the applicable statutory monetary ceiling.

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