Question 1

Who is eligible for gratuity in India?

Accepted Answer

Employees are generally eligible after completing five years of continuous service, with exceptions in cases such as death or disablement.

Question 2

What salary is used for gratuity calculation?

Accepted Answer

The usual formula uses last drawn basic salary plus dearness allowance, not full cost-to-company.

Question 3

Why is gratuity divided by 26?

Accepted Answer

The formula treats a month as 26 working days and grants 15 days of wages for each completed year of service.

Question 4

Is gratuity taxable?

Accepted Answer

Tax treatment depends on employer type, exemption limits, and employee status. The calculator estimates the amount, not taxability.