Gratuity Calculator
A simple, reliable tool to calculate gratuity online. If you're a salaried employee — especially in the private sector — this calculator helps you estimate the amount you'll receive at the end of your service, based on the Payment of Gratuity Act, 1972.
What is Gratuity?
Gratuity is a statutory benefit paid by an employer to an employee as a reward for long-term service. It's governed by the Payment of Gratuity Act, 1972, which applies to factories, mines, plantations, ports, railway companies, and establishments with 10 or more employees. Gratuity becomes payable when an employee leaves an organization due to retirement, resignation after completing the eligibility period, termination after continuous service, or death or permanent disablement — in which case the minimum service requirement does not apply.
Who is Eligible for Gratuity?
An employee generally becomes eligible for gratuity after completing at least 5 years of continuous service with the same employer. Continuous service includes periods of paid leave, maternity leave, and layoffs or strikes not caused by the employee. Fixed-term employees are treated differently — under the Code on Social Security, 2020, they're eligible for gratuity on a pro-rata basis even without completing 5 years.
Formula for Calculation of Gratuity
For employees covered under the Act: Gratuity = (Last drawn Basic Salary + Dearness Allowance) × 15 × Years of Service ÷ 26. Here, 15 represents 15 days of salary for each completed year of service, and 26 represents the standard number of working days in a month. Any service period exceeding 6 months in the final year is rounded up to the next full year.
Example Calculation
Suppose an employee's last drawn Basic + DA is ₹30,000 and they've completed 10 years of service. Gratuity = (30,000 × 15 × 10) ÷ 26 = approximately ₹1,73,077. Use the calculator above to get this result instantly for your own numbers.
Frequently Asked Questions
For employees covered under the Payment of Gratuity Act, gratuity received up to ₹20 lakh is exempt from income tax. Amounts above this statutory ceiling may be taxable — check with a tax professional for your specific situation.
In most cases, you won't be eligible for gratuity if you resign before completing 5 years of continuous service, unless you're a fixed-term employee (eligible pro-rata) or leaving due to death or disability.
Yes — under the Code on Social Security, 2020, fixed-term employees are entitled to gratuity on a pro-rata basis, without needing to complete 5 years of service.
Yes, the current statutory ceiling is ₹20,00,000. Employers can choose to pay more, but amounts above the ceiling may not carry the same tax exemption.
This calculator provides an estimate based on the standard statutory formula. Your actual entitlement can vary based on company policy, state-specific rules, and your exact employment terms — consult your HR team or a professional for a definitive figure.