Gratuity Calculator
Estimate the gratuity payable after five or more years of service under the Payment of Gratuity Act.
Gratuity Payable
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How the gratuity calculator works
Enter your last drawn monthly basic + DA and your completed years of service (5 or more). The calculator applies the statutory formula (15 × salary × years) ÷ 26 for employees covered by the Payment of Gratuity Act.
Good to know
- The exemption ceiling is ₹20 lakh for covered private employees.
- Service beyond 6 months in the last year rounds up to a full year.
- The 5-year minimum is waived if service ends due to death or disablement.
Frequently Asked Questions
Who is eligible for gratuity?
Under the Payment of Gratuity Act, employees who complete at least 5 years of continuous service with an employer (covered by the Act) are eligible, payable on resignation, retirement, or death/disablement (where the 5-year rule is waived).
How is gratuity calculated?
For employees covered by the Act: Gratuity = (15 × last drawn basic+DA × years of service) ÷ 26. The '15/26' represents 15 days' wages for each completed year, based on a 26-day working month.
Is a period over 6 months counted as a full year?
Yes. Service beyond six months in the final year is rounded up to a full year; six months or less is ignored. For example, 7 years 8 months counts as 8 years.
Is gratuity taxable?
Gratuity is tax-exempt up to ₹20 lakh (lifetime limit) for non-government employees covered by the Act. Amounts above that, or specific cases, may be taxable. Verify against current rules.
Disclaimer: This calculator produces illustrative estimates only. Actual returns vary and, unless stated otherwise, results exclude expense ratios, exit loads, transaction costs, and taxes. Assumed rates are inputs, not forecasts or assured returns. This is educational content, not personalized investment advice — see our full disclaimer.