Calculate your gratuity payout as per the Payment of Gratuity Act, 1972
Eligibility: Minimum 5 years of continuous service with the same employer. However, in case of death or disability, gratuity is paid regardless of tenure.
Maximum Limit: The maximum gratuity that can be paid under the Gratuity Act is ₹20 lakh (revised in 2018). Employers can pay more voluntarily.
Tax Exemption: For private sector employees under the Gratuity Act, gratuity up to ₹20 lakh is completely tax-free.
26 Working Days: The formula uses 26 (not 30) because a month is considered to have 26 working days under the Gratuity Act.
Enter your last drawn monthly Basic Salary plus Dearness Allowance (DA). Gratuity is calculated on Basic + DA only — HRA, incentives, and other allowances are excluded.
Enter how many years you have worked with the same employer. Any period of 6 months or more in the last year is rounded up to a full year.
Organizations with 10 or more employees are covered under the Gratuity Act (15/26 formula). Smaller organizations use 15/30 formula, giving a slightly lower payout.
The calculator instantly shows your gratuity amount, tax-free portion, and eligibility status.
Gratuity Formula (Gratuity Act): (Basic + DA) × 15/26 × Years of Service
Not covered formula: (Basic + DA) × 15/30 × Years of Service
Example: ₹50,000 Basic+DA × 15/26 × 10 years = ₹2,88,461
An employee must complete a minimum of 5 continuous years of service with the same employer to be eligible for gratuity. In case of death or permanent disability, gratuity is paid regardless of the years served.
Under the Payment of Gratuity Act, a year has 26 working days (not 30). This is why the formula uses 15/26. If your last year of service is 6 months or more, it is counted as a full year for the purpose of gratuity calculation.
For government employees, gratuity is fully tax-free. For private sector employees covered under the Gratuity Act, gratuity up to ₹20 lakh is exempt from income tax. Any amount above ₹20 lakh is taxable as per the employee's income slab.
The employer must pay gratuity within 30 days from the date it becomes payable (retirement, resignation, or death). If delayed beyond 30 days, the employer must pay simple interest at the prescribed rate.
Yes, gratuity can be forfeited partially or fully if an employee is terminated due to misconduct that causes financial damage to the employer, or in cases of moral turpitude or disorderly conduct resulting in termination.