💰 The Payout
Gratuity Amount
Understanding the Final Figure
Is There a Limit?
Yes, gratuity amounts are not infinite. There are statutory caps in place to protect employers from excessive liability while ensuring employees are fairly compensated.
🇦🇪 UAE Cap
The total gratuity amount cannot exceed two years' total salary.
🇮🇳 India Cap
The maximum tax-exempt gratuity amount is ₹20 Lakhs. Any amount above this may be taxable.
Factors Influencing Amount
- Basic Salary Increases: Since gratuity is based on the last drawn salary, a pay hike right before leaving significantly boosts the total amount.
- Unpaid Leave: Deducting unpaid leave days reduces the "Years of Service" multiplier.