Gratuity Calculator
Calculate your gratuity amount under the Payment of Gratuity Act, based on your last drawn salary and years of service.
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Your result
₹4,15,384.62
Gratuity amount
AI explanation
Formula
Gratuity = (15 × last drawn salary × years of service) / 26, capped at ₹20 lakhWorked example
₹60,000 last salary, 12 years of service
| Field | Value |
|---|---|
| Last drawn monthly salary (Basic + DA) | 60000 |
| Years of service | 12 |
| Gratuity amount | 415384.62 |
| Capped at statutory limit? | false |
Assumptions
- Applies to employees covered under the Payment of Gratuity Act, 1972 (establishments with 10 or more employees), payable after 5 years of continuous service (with some exceptions).
- Uses the statutory ₹20 lakh ceiling on tax-exempt gratuity for private-sector employees.
- Informational only.
Frequently asked questions
Who is eligible for gratuity?
Employees who have completed at least 5 years of continuous service with an employer covered under the Payment of Gratuity Act (establishments with 10+ employees), with exceptions for death or disability where the 5-year rule doesn't apply.
Why does the formula use 26 instead of 30?
The Act's formula assumes 26 working days per month (excluding 4 Sundays), a standard convention for gratuity and several other Indian statutory payroll calculations.
Is gratuity taxable?
Government employees receive gratuity entirely tax-free. Private-sector employees get a tax exemption up to ₹20 lakh (the statutory ceiling), with any amount above that taxed as salary income.
Related calculators
Sources
- Payment of Gratuity Act, 1972 — Ministry of Labour and Employment, Government of India. Effective 21-09-1972, reviewed 13-09-2026.
This calculator provides a general estimate only and does not constitute legal or financial advice. Confirm your exact entitlement with your employer's HR department.
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