Gratuity Calculator

Calculate your gratuity amount based on Payment of Gratuity Act. Free, accurate calculation for private & government employees.

Enter Details

Employee Type

Basic Salary (Monthly)

₹

Dearness Allowance (DA)

₹

Years of Service

Additional Months

Note: Gratuity is payable only after completing 5 years of continuous service. If you have worked for 6 months or more in the final year, it is counted as a full year.

Gratuity Amount

₹3.46 LTotal Gratuity

Gratuity Amount₹3.46 L

Detailed Breakdown

Parameter	Value
Basic Salary	₹50.00 K
Dearness Allowance	₹10.00 K
Total Salary (Basic + DA)	₹60.00 K
Effective Years of Service	10 years
Gratuity per Year	₹34.62 K
Gratuity per Month	₹2.88 K
Total Gratuity Amount	₹3.46 L

Gratuity Formula

Gratuity = (Basic + DA) × 15 × Years of Service / 26

Days of salary per year of service

Working days per month

5 Years

Minimum service required

Eligibility

Minimum 5 years of continuous service required. Applicable to companies with 10+ employees.

Tax Benefit

Gratuity is tax-free up to ₹20 lakhs for employees covered under the Payment of Gratuity Act.

Maximum Limit

Maximum gratuity payable is capped at ₹20 lakhs as per the current government regulations.

What is Gratuity Calculator, and How Does it Help You

Gratuity is a lump-sum financial benefit paid by an employer to an employee as a token of appreciation for their continuous service. Under the Payment of Gratuity Act, 1972, employees who complete five or more years of continuous service with an establishment having 10 or more employees are eligible for gratuity upon retirement, resignation, or termination.

The Gratuity Calculator estimates the gratuity amount you are entitled to receive based on your last drawn basic salary and the number of years of continuous service.

Statutory Rule Alignment

Applies the official Payment of Gratuity Act formula based on a 26-day working month.

Tax Exemption Checker

Helps check your gratuity against the government-mandated tax exemption limit (up to ₹20 lakh).

Flexible Service Inputs

Rounds off service tenure correctly (more than 6 months is rounded up to the next year).

How Does the Gratuity Calculator Work?

The calculator computes gratuity using the last drawn basic salary plus dearness allowance (DA) and the total tenure of service.

Gratuity = (Basic Salary + DA) * (15 / 26) * Years of Service

Basic Salary: Last drawn basic salary of the employee

DA: Dearness Allowance paid to the employee (if applicable)

15/26: Represents 15 days of salary out of 26 working days in a month

Service: Continuous years of employment with the company

If an employee has 10 years of service and their last drawn basic salary + DA is ₹80,000, the calculator computes: Gratuity = 80,000 * (15 / 26) * 10 = ₹4,61,538. This is the tax-free gratuity amount payable to the employee.

How to Use Gratuity Calculator

Using the Gratuity Calculator is extremely simple and takes just a few seconds. Follow these steps:

Enter Last Drawn Basic Salary

Input your last drawn basic monthly salary plus dearness allowance (DA).

Specify Years of Service

Enter the total continuous years of service you completed at the company.

Analyze the Output

The calculator instantly displays the estimated gratuity and details its tax exemption status.

Advantages of Using Gratuity Calculator

✓ Retirement Corpus Planning

Incorporate your gratuity payout into your overall retirement financial projections.

✓ Job Switch Valuation

Evaluate the cost of leaving a company before completing the mandatory 5-year tenure threshold.

✓ Employment Verification

Cross-check that your employer's final settlement matches the statutory gratuity guidelines.

✓ Tax Exempt Status Checks

Verify how much of your gratuity is tax-exempt and plan tax declarations accordingly.

Frequently Asked Questions

Gratuity is a lump sum payment made by an employer to an employee as gratitude for services rendered. To be eligible, an employee must complete at least 5 years of continuous service in an organization covered under the Payment of Gratuity Act, 1972. This applies to companies with 10 or more employees.

For employees covered under the Gratuity Act: Gratuity = (Last Drawn Salary × 15 × Years of Service) / 26. Here, Last Drawn Salary = Basic Salary + Dearness Allowance, 15 represents 15 days of salary per year, and 26 represents working days in a month.

The maximum gratuity amount is capped at ₹20 lakhs as per the Payment of Gratuity (Amendment) Act, 2018. Any gratuity amount calculated above this limit will be capped at ₹20 lakhs. This limit applies to both private and government sector employees.

Gratuity received is tax-free up to ₹20 lakhs for employees covered under the Payment of Gratuity Act. For government employees, the entire gratuity amount is tax-free. Any amount exceeding ₹20 lakhs is taxable as per the employee's income tax slab.

If you leave the organization before completing 5 years of continuous service, you are not eligible for gratuity under the Payment of Gratuity Act. However, some employers may have their own policies that provide gratuity even before 5 years.

Yes, if you have completed 4 years and more than 6 months of service, it is rounded up to 5 years for gratuity calculation purposes. Any service of 6 months or more in the final year is considered as a complete year.

For private sector employees, gratuity is calculated using 15/26 formula. For government employees (covered under CCS Rules), the formula used is (Basic + DA) × 15 × Years / 26, but the qualifying service and maximum limit may differ based on specific rules.

As per the Payment of Gratuity Act, the employer must pay gratuity within 30 days from the date it becomes payable. If delayed beyond 30 days, the employer must pay simple interest at the rate specified by the government.

Yes, many employers include gratuity as part of the Cost to Company (CTC). The employer's contribution to gratuity (typically 4.81% of basic salary) is shown in the CTC breakdown, but you receive it only when you become eligible after 5 years of service.

Yes, gratuity can be partially or fully forfeited if the employee's services are terminated due to: 1) Riotous or disorderly conduct, 2) Act of violence, 3) Theft, fraud or embezzlement, 4) Causing damage to employer's property, or 5) Any act involving moral turpitude.

Contract employees working for the same employer for 5+ continuous years are eligible for gratuity. The eligibility is based on continuous service regardless of the employment type. However, if the contract is with a contractor rather than the principal employer, the contractor is liable to pay gratuity.

To claim gratuity, you typically need: 1) Application in Form I or Form L, 2) Service certificate or appointment letter, 3) Bank account details, 4) ID proof, 5) Nomination form (Form F) if applicable, and 6) Death certificate (in case of nominee claiming).