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Gratuity Calculator

Estimate the gratuity you are eligible for based on your last drawn salary and completed years of service.

Quick presets

Gratuity Calculator

₹ / month
Labour-code 50% wage check optional
₹
Since 21 Nov 2025 'wages' must be at least 50% of total remuneration — excess allowances are added back.
Gratuity payable
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After ₹20 lakh cap
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Tax-exempt part
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≈ months of wages
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Gratuity as your service grows at today's wages

Educational estimate, not financial or tax advice. Returns are never guaranteed. Everything is calculated in your browser.

Runs in your browser — nothing you enter is uploaded or stored.

ToolFeather · 15/26 formula
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About the Gratuity Calculator

Gratuity is a lump sum an employer pays as a thank-you for long service, governed in India by the Payment of Gratuity Act, 1972. You generally become eligible after completing five continuous years with an employer, and it is paid on resignation, retirement or, in some cases, earlier.

For establishments covered by the Act, gratuity is calculated as (15 × last drawn monthly salary × years of service) ÷ 26, where salary means Basic + Dearness Allowance and 26 represents the working days in a month. This tool applies that formula and also shows the amount after the statutory ceiling of ₹20 lakh, which is the maximum tax-exempt gratuity.

The result is an estimate. Rules on rounding of part-years, coverage under the Act, and tax treatment can vary by employer and situation, so treat this as a guide. All calculation happens in your browser.

Examples

₹50,000 salary, 10 years → gratuity ≈ ₹2,88,462.
₹1,00,000 salary, 25 years → formula gives ₹14.42 lakh, within the ₹20 lakh cap.
₹1,50,000 salary, 30 years → formula exceeds ₹20 lakh, so the capped column shows ₹20,00,000.

Frequently asked questions

5 answers
Who is eligible for gratuity?
Permanent employees who complete at least five years of continuous service are eligible; under the Code on Social Security, in force from 21 November 2025, fixed-term employees qualify after just one year (paid pro-rata), with exceptions for death or disablement where the five-year rule is waived.
What salary should I enter?
Enter your last drawn monthly Basic plus Dearness Allowance. Other allowances and bonuses are not part of the gratuity formula under the Act.
Why divide by 26?
The Act treats a month as 26 working days, so 15 days' wages per year of service works out to 15/26 of the monthly salary per year.
Is gratuity taxable?
Statutory gratuity is tax-exempt up to ₹20 lakh over your lifetime. Amounts above that ceiling, or non-covered payments, may be taxable.
How are part-years counted?
Under the Act, service beyond six months in the final year is usually rounded up to a full year. This tool uses the exact years you enter, so adjust accordingly.