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Gratuity Calculator
As per Payment of Gratuity Act
Gratuity Amount
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Gratuity Payable
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Formula: 15 × Salary × Years / 26. Minimum 5 years of service required.
❓ FAQs
How does this calculator work?▼
Enter the required values and click Calculate. Results appear instantly using standard financial formulas.
Is this free?▼
Yes, completely free. No login or signup required.
Are calculations accurate?▼
Yes, industry-standard formulas. For large decisions, consult a financial advisor.
📊 What is the Gratuity Calculator and How Does It Work?
Under the Payment of Gratuity Act 1972, employees with 5+ years of continuous service are entitled to gratuity. The formula uses 15 days salary for each year of service (26 working days per month). Maximum tax-exempt amount is ₹20 lakh.
Formula
Gratuity = (Last drawn Basic+DA × 15 × Years of service) / 26 | Tax-free up to ₹20 lakh🪓 Step-by-Step: How to Use This Calculator
- Enter your last drawn basic salary plus DA
- Enter total years of continuous service (minimum 5 years)
- Select whether your organisation is covered under the Gratuity Act
- Click Calculate to see your exact gratuity entitlement
📌 Example Calculation
Basic+DA ₹50,000, service 10 years: Gratuity = (50,000 × 15 × 10) / 26 = ₹2,88,461. Completely tax-free as it is below ₹20L limit.
✅ Benefits of Using This Calculator
- Know your exact legal gratuity entitlement
- Plan retirement corpus including gratuity
- Verify employer's gratuity calculation accuracy
- Check if you meet the 5-year eligibility threshold
- Factor gratuity in job change decisions
- Understand the financial benefit of longer tenure
⚙️ Key Factors That Affect Results
- Last drawn basic salary plus Dearness Allowance
- Years of continuous service (minimum 5)
- Organisation covered under Gratuity Act (10+ employees)
- Tax-exempt limit — ₹20 lakh per person
- Government employees have a different calculation formula
- Fraction of last year: more than 6 months rounds up to 1 year
❓ Frequently Asked Questions
Who is eligible for gratuity?▼
Any employee with 5+ years of continuous service. On death or disability, the 5-year requirement is waived.
Is gratuity taxable?▼
Up to ₹20 lakh is tax-free for private sector employees. For government employees, the entire gratuity is tax-free.
What if the employer doesn't pay?▼
File a complaint with the Regional Labour Commissioner. The employer faces fine and imprisonment.
Is part of the last year counted?▼
Yes. If service in the last year exceeds 6 months, it is rounded up to 1 full year for calculation.
Can I claim gratuity after resignation?▼
Yes, after completing 5 years of continuous service. It must be paid within 30 days.