{"id":4543,"date":"2026-05-29T22:02:15","date_gmt":"2026-05-29T22:02:15","guid":{"rendered":"https:\/\/aaxonix.com\/resources\/?post_type=glossary&#038;p=4543"},"modified":"2026-05-30T02:53:16","modified_gmt":"2026-05-30T02:53:16","slug":"gratuity-zoho-payroll","status":"publish","type":"glossary","link":"https:\/\/aaxonix.com\/resources\/glossary\/gratuity-zoho-payroll\/","title":{"rendered":"Gratuity"},"content":{"rendered":"<style>\n.gt-body{font-family:'Poppins',sans-serif;color:#111;line-height:1.75}\n.gt-def{border-left:4px solid #E8650A;padding:16px 20px;background:#fff8f4;border-radius:0 8px 8px 0;margin:0 0 32px;font-size:1.05rem}\n.gt-section{margin:0 0 36px}.gt-section h2{font-family:'Fraunces',serif;color:#0A1628;font-size:1.5rem;margin:0 0 12px}\n.gt-example-box{background:#f0f4ff;border-radius:10px;padding:20px 24px;margin:0 0 32px}.gt-example-box strong{color:#2563EB}\n.gt-related-pills{display:flex;flex-wrap:wrap;gap:10px;margin:0 0 32px}\n.gt-related-pill{background:#f7f4ef;border:1px solid #ddd8cf;border-radius:20px;padding:6px 16px;font-size:.875rem;color:#0A1628;text-decoration:none}\n.gt-faq-item{border:1px solid #ddd8cf;border-radius:10px;padding:16px 20px;margin:0 0 12px}\n<\/style>\n<div class=\"gt-body\">\n<div class=\"gt-def\">Gratuity in Zoho Payroll is a statutory benefit payable under the Payment of Gratuity Act, 1972, to employees who have completed at least five years of continuous service. The formula is: (Last drawn Basic + DA) divided by 26 (working days per month) multiplied by 15 multiplied by completed years of service. Zoho Payroll tracks gratuity accrual and computes the payable amount during full and final settlement.<\/div>\n<div class=\"gt-section\">\n<h2>Gratuity Calculation Formula in India<\/h2>\n<p>The statutory gratuity formula uses Basic plus DA as the base, divides by 26 (not 30 or the actual days in a month), and multiplies by 15 days per year of service. Partial years above 6 months are rounded up. For example, 5 years and 8 months is treated as 6 years. The maximum tax-exempt gratuity for private sector employees is Rs 20 lakh (Budget 2019).<\/p>\n<\/div>\n<div class=\"gt-section\">\n<h2>Gratuity Accrual vs Payment<\/h2>\n<p>Gratuity accrues throughout the employee&#8217;s tenure but is paid only on exit. Zoho Payroll shows the accrued gratuity liability in payroll reports, which helps finance teams provision the expense. When an employee exits, the final settlement screen in Zoho Payroll computes the exact gratuity payable based on service duration and last Basic.<\/p>\n<\/div>\n<div class=\"gt-section\">\n<h2>Tax Treatment of Gratuity<\/h2>\n<p>Gratuity received by private sector employees is exempt from income tax up to Rs 20 lakh under Section 10(10). Amounts above this limit are taxable. Zoho Payroll computes the taxable and exempt portions when processing the final settlement and includes the figures in the relieving payslip and Form 16 Part B.<\/p>\n<\/div>\n<div class=\"gt-example-box\"><strong>Example:<\/strong> An employee with Basic Rs 25,000 per month resigns after 7 years and 4 months of service. Service rounds to 7 years. Gratuity = (25,000 \/ 26) x 15 x 7 = Rs 1,01,923. Tax-exempt (within Rs 20 lakh limit). Zoho Payroll computes this in the full and final settlement screen.<\/div>\n<div class=\"gt-related-pills\"><a href=\"https:\/\/aaxonix.com\/resources\/glossary\/gratuity-eligibility-zoho-payroll\/\" class=\"gt-related-pill sp-content-link\">Gratuity Eligibility<\/a><a href=\"https:\/\/aaxonix.com\/resources\/glossary\/basic-salary-zoho-payroll\/\" class=\"gt-related-pill sp-content-link\">Basic Salary<\/a><a href=\"https:\/\/aaxonix.com\/resources\/glossary\/payroll-report-zoho-payroll\/\" class=\"gt-related-pill sp-content-link\">Payroll Report<\/a><a href=\"https:\/\/aaxonix.com\/resources\/glossary\/tds-on-salary-zoho-payroll\/\" class=\"gt-related-pill sp-content-link\">TDS on Salary<\/a><\/div>\n<div class=\"gt-faq-item\"><strong>What is Gratuity in Zoho Payroll?<\/strong><\/p>\n<p>Gratuity is a statutory lump-sum payment in Zoho Payroll made to employees who have completed at least five years of service. The Payment of Gratuity Act formula uses last drawn Basic divided by 26, multiplied by 15 days per year of service. Zoho Payroll computes this during full and final settlement.<\/p>\n<\/div>\n<div class=\"gt-faq-item\"><strong>Is gratuity taxable in Zoho Payroll?<\/strong><\/p>\n<p>Gratuity up to Rs 20 lakh is tax-exempt for private sector employees under Section 10(10). Amounts above this threshold are taxable. Zoho Payroll calculates the exempt and taxable portions during final settlement and includes the figures in the employee&#8217;s Form 16 for the year of exit.<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Gratuity in Zoho Payroll is a statutory lump-sum payment made to employees on retirement, resignation, or death after completing a minimum of five years of continuous service.<\/p>\n","protected":false},"template":"","meta":{"seo_title":"Gratuity | Zoho Payroll Glossary","seo_description":"Gratuity in Zoho Payroll is a statutory lump-sum payment made to employees on retirement, resignation, or death after completing a minimum of five years of","seo_keyword":"gratuity zoho payroll","seo_faqs":"[{\"q\": \"What is Gratuity in Zoho Payroll?\", \"a\": \"Gratuity is a statutory lump-sum payment in Zoho Payroll made to employees who have completed at least five years of service. 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