Gratuity Calculator
As per Payment of Gratuity Act, 1972
₹
yrs
Gratuity Amount
—
Formula Used
—
Tax Exempt (up to)
₹20,00,000

What is gratuity?

Gratuity is a one-time payment made by an employer to an employee as appreciation for their service upon leaving (resignation, retirement, death, or disablement). It is payable to employees who have completed at least 5 years of continuous service under the Payment of Gratuity Act, 1972.

Formula used

For employees covered under the Gratuity Act (10+ employees): Gratuity = (Basic + DA) × 15 × Years of service ÷ 26 For employees NOT covered: Gratuity = (Basic + DA) × 15 × Years of service ÷ 30 Note: Service rounded to nearest half year (6+ months = 1 year) Max tax-exempt gratuity: ₹20,00,000

How to use this calculator

  1. Enter last drawn monthly basic salary + DA
  2. Enter completed years of service (years and months)
  3. Select whether your company is covered under the Gratuity Act
  4. Click Calculate

Example

Example 1 — 10 years service:
Basic + DA: ₹50,000/month | Service: 10 years
Gratuity = (50,000 × 15 × 10) ÷ 26 = ₹2,88,461

Example 2 — 25 years service at senior level:
Basic: ₹80,000/month | Service: 25 years
Gratuity = (80,000 × 15 × 25) ÷ 26 = ₹11,53,846 — fully tax-exempt

Example 3 — Service rounds up (5 years 8 months = 6 years):
Basic: ₹40,000 | 5 yrs 8 months → rounds to 6 years
Gratuity = (40,000 × 15 × 6) ÷ 26 = ₹1,38,461

Frequently asked questions

5 years of continuous service. Exception: death or total disablement — gratuity is paid regardless of service length.
For private sector: exempt up to ₹20 lakh. Government employees: fully exempt. Amount above ₹20L is taxable.
File a complaint with the Controlling Authority under the Payment of Gratuity Act. The employer must pay within 30 days — delays attract government-mandated interest.