Gratuity Calculator (India)
Calculate the gratuity you're entitled to when leaving a job after 5+ years of service, using the statutory formula under India's Payment of Gratuity Act: 15 days' salary for every completed year.
How to use this calculator
- Enter your last drawn Basic + DA — allowances like HRA don't count.
- Enter total years of service; 6+ months in the final year rounds up.
- Press Calculate to see your statutory gratuity and whether the ₹20 lakh cap applies.
Formula used
15 days' wages per year of service, with a month counted as 26 working days — hence 15/26. Service of 6 months or more in the final year counts as a full year. The tax-free ceiling is ₹20,00,000.
Example calculation
Basic + DA of ₹50,000 after 10 years 7 months (counts as 11 years):
Gratuity = 15/26 × 50,000 × 11 = ₹3,17,308 — fully tax-free.
What is gratuity?
Gratuity is a statutory lump-sum benefit Indian employers must pay employees who leave after 5 or more years of continuous service — on resignation, retirement, or termination (and without the 5-year condition in case of death or disablement). It's the law's way of rewarding tenure.
The formula's quirks matter: only Basic + DA counts (often just 40–50% of gross salary), a month is 26 days, and the final-year rounding rule can make staying one extra month worth an entire year's gratuity.
Why use this calculator?
- Know your entitlement before resigning — timing near the 6-month rounding line can be worth a full year.
- Verify the amount your employer's full-and-final settlement offers.
- Factor gratuity into job-switch math alongside notice pay and leave encashment.
Frequently asked questions
Am I eligible for gratuity at 4 years 7 months?
Generally the Act requires 5 completed years, though several court rulings have accepted 4 years + 240 days of service in the fifth year. Many employers apply the strict 5-year rule — check your company policy and state jurisdiction.
Is gratuity taxable?
For private employees covered by the Act, gratuity is tax-exempt up to ₹20 lakh (lifetime, across employers). Government employees' gratuity is fully exempt. Anything above the exemption is taxed as salary.
Does gratuity count my full salary?
No — only Basic + Dearness Allowance. If your CTC is structured with a low basic, your gratuity shrinks accordingly, which is one hidden cost of allowance-heavy salary structures.