Gratuity Calculator

Estimate the gratuity amount you are entitled to receive from your employer.

₹50,000
₹10,000₹5,00,000
5Yr
5Yr40Yr

* Assumes you are covered under the Payment of Gratuity Act, 1972. Minimum 5 years of continuous service required.

Total Gratuity Payable
₹ 1,44,231

Understanding the Gratuity Benefits

What is Gratuity?

Gratuity is a monetary benefit paid by an employer to an employee in appreciation of the services rendered by them to the company. Under the Payment of Gratuity Act, 1972, it is a statutory right of an employee who has completed 5 or more years of continuous service in the same organization.

How is Gratuity Calculated?

For employees covered under the Act, the formula is: Gratuity = (15 × Last Drawn Basic Salary × Years of Service) / 26. In this formula, 15 represents 15 days of wages for every completed year of service, and 26 represents the number of working days in a month.

Tax Exemption Rules

Gratuity received by government employees is fully exempt from income tax. For non-government employees covered under the Act, the gratuity is tax-exempt up to a maximum limit of ₹20 Lakhs. Any amount received above this limit is taxable as per your applicable income tax slab.

Frequently Asked Questions

Is 5 years of service absolutely mandatory?

Yes, 5 years of continuous service is mandatory to be eligible for gratuity. The only exceptions are death or disablement of the employee, in which case the 5-year rule does not apply and gratuity must be paid to the nominee.

What does 'Last Drawn Basic Salary' include?

For the calculation of gratuity, 'Salary' strictly means your Basic Salary plus Dearness Allowance (DA). It does not include HRA, bonuses, commissions, or any other allowances.

How are fractional years counted?

If you have worked for 6 months or more in your final year of service, it is rounded up to a full year. For example, 7 years and 7 months will be counted as 8 years. But 7 years and 5 months will be counted as 7 years.