Gratuity Calculator
Leaving a job after 5+ years? Figure out what gratuity you're owed. Calculated as per the Payment of Gratuity Act using the formula: (Basic + DA) x 15/26 x years of service.
This calculator is designed for India. Rates and rules are based on Indian regulations. If you are outside India, the values may not apply to your country.
How to use
- Enter your last drawn basic salary plus DA per month - this is what's on your payslip, not your full CTC.
- Enter how many years you've worked with this employer.
- You need at least 5 years of service to be eligible. Less than that and gratuity doesn't apply.
- Hit Calculate to see what you're owed.
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Gratuity is a lump sum payment made by an employer to an employee as a token of gratitude for services rendered. In India, it is governed by the Payment of Gratuity Act, 1972, and is applicable to organisations with 10 or more employees. An employee becomes eligible for gratuity after completing a minimum of 5 years of continuous service.
The gratuity formula under the Act is: Gratuity = (Last drawn Basic + DA) × 15/26 × Number of years of service. The factor 15/26 represents 15 working days out of 26 working days in a month. The maximum gratuity exempted from tax is ₹20 lakhs for government employees and ₹20 lakhs for private sector employees (revised in 2019).
Frequently Asked Questions
What is the minimum service period to be eligible for gratuity?
An employee must complete at least 5 years of continuous service to be eligible for gratuity. However, in case of death or disability, gratuity is paid regardless of the years of service.
Is gratuity taxable in India?
For government employees, gratuity is fully tax-exempt. For private sector employees covered under the Gratuity Act, the tax exemption is the least of: actual gratuity received, ₹20 lakhs, or (last drawn salary × 15/26 × years of service). Any amount above ₹20 lakhs is taxable.
Is gratuity paid on resignation?
Yes, gratuity is payable on resignation provided the employee has completed 5 years of continuous service. It is also payable on retirement, death, disablement, or termination.
How is gratuity calculated for non-covered employees?
For employees not covered under the Gratuity Act (organisations with fewer than 10 employees), the formula is: Gratuity = (Last drawn salary × 15 × Years of service) / 30. Some employers voluntarily pay gratuity to all employees.
Disclaimer: Results are estimates for informational purposes only and do not constitute financial, tax, or investment advice. Figures may vary based on actual terms. Always consult a qualified financial advisor before making financial decisions.