Gratuity Calculator
Calculate the gratuity due when you leave a job.
Your inputs
Formula: last drawn basic + DA × 15/26 × years of service. Statutory ceiling of ₹20 lakh applied.
Estimates only. Figures are indicative and do not constitute financial advice.
About the Gratuity Calculator
If you're leaving a job after several years and searching "gratuity calculator" or "how is gratuity calculated," you want a fast, correct answer — and that's exactly what this tool gives you, using the same formula defined under the Payment of Gratuity Act, 1972 that most Indian employers follow.
Gratuity is a lump-sum benefit paid by an employer to an employee who has completed at least 5 years of continuous service, as a reward for long-term service, payable on resignation, retirement, or termination (with some exceptions for death or disability, where the 5-year rule doesn't apply). The formula is: last drawn monthly basic salary plus dearness allowance, multiplied by 15, divided by 26, multiplied by your number of years of service — the 15/26 represents 15 days' wages for every completed year, based on a 26-working-day month. There's also a statutory ceiling of ₹20 lakh on tax-exempt gratuity payable under the Act, which this calculator applies automatically. This tool is useful whether you're negotiating your exit from a company, planning how many more years to stay before a milestone anniversary meaningfully increases your payout, or just curious what your gratuity would be worth today if you resigned. Keep in mind that gratuity rules can differ slightly for organizations not covered under the Act, and government employees follow a separate pension-linked gratuity scheme — this calculator reflects the standard private-sector formula.
How to use this calculator
- Enter your last drawn monthly basic salary plus dearness allowance.
- Enter your total years of service.
- See your gratuity payable, capped at the statutory ₹20 lakh ceiling.
Frequently asked questions
›What is the gratuity calculation formula in India?
Gratuity = (last drawn monthly basic salary + DA) × 15 / 26 × number of years of service, as defined under the Payment of Gratuity Act, 1972.
›How many years of service are needed to be eligible for gratuity?
You generally need at least 5 years of continuous service with the same employer to be eligible for gratuity, except in cases of death or disability, where this condition doesn't apply.
›Is gratuity taxable in India?
Gratuity received is tax-exempt up to the statutory limit of ₹20 lakh for employees covered under the Payment of Gratuity Act; any amount above that limit is taxable as salary income.
›Is a part of a year counted for gratuity calculation?
Typically, a period of service of more than 6 months in the final year is rounded up to a full year for gratuity calculation purposes.
›Do all employers in India have to pay gratuity?
The Payment of Gratuity Act applies to establishments with 10 or more employees; smaller organizations may not be legally required to pay gratuity, though some do so voluntarily.
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The ₹20 Lakh Gratuity Ceiling That Catches Long-Tenure Employees Off Guard