Gratuity Calculator
Enter your last drawn basic salary (plus dearness allowance) and your years of service to estimate the gratuity your employer owes you.
Runs entirely in your browser — your numbers never leave this page.
How it works
Gratuity is a lump sum your employer pays you as a thank-you for long service. Under India's Payment of Gratuity Act, 1972, the formula is:
Gratuity = (Last drawn Basic + DA) × 15 ÷ 26 × Years of service
The 15 stands for 15 days of wages for every completed year, and 26 is the number of working days in a month used for the calculation.
- Eligibility: 5 years of continuous service with the same employer (waived in case of death or disablement).
- Rounding: service of 6 months or more in the final year counts as a full year.
- Tax: gratuity received is exempt from income tax up to ₹20 lakh.
- Salary means: basic + dearness allowance only — not HRA, bonuses, or total CTC.
Frequently asked questions
Who is eligible for gratuity in India?
Employees who complete 5 years of continuous service with the same employer. The 5-year rule is waived if the employee dies or is disabled on duty.
Is gratuity calculated on CTC or basic salary?
Only on basic salary plus dearness allowance (DA). HRA, special allowances, and bonuses are excluded.
Is gratuity taxable?
Gratuity is tax-free up to ₹20 lakh under current rules. Amounts above that are taxed as salary income.
What if I worked 4 years and 8 months?
Service of 6 months or more in the last year counts as a full year, so 4 years 8 months rounds to 5 years — making you eligible.
Why is the formula divided by 26?
The Act treats a month as 26 working days (excluding weekly offs). 15 days of wages per year ÷ 26 working days gives the per-year factor.
When should gratuity be paid?
The employer must pay within 30 days of it becoming due (e.g. your last working day). Delays attract simple interest.
Is there a maximum limit on gratuity?
There is no legal ceiling on what an employer can pay — companies may pay more than the formula as ex-gratia. The tax exemption, however, is capped at ₹20 lakh; anything above that is taxed as salary income.
Can I claim gratuity if I resign before completing 5 years?
Generally no — the Act requires 5 years of continuous service. The exception is death or disablement on duty, where gratuity is paid regardless of tenure. Some employers voluntarily pay ex-gratia for shorter service, but they are not legally required to.
Does my notice period count toward the 5 years?
Yes. Continuous service includes the notice period, paid leave, and layoff periods. What matters is unbroken employment with the same employer, not days physically worked.
How is gratuity calculated for daily-wage or piece-rated workers?
For daily-wage workers, 15 days wages are computed from the average daily wage of the 3 months before retirement or resignation, then multiplied by years of service. The same ÷26 monthly convention applies.