Gratuity Calculator
What your employer owes on exit. Calculate the gratuity payable after five or more years of service under the Payment of Gratuity Act.
About the Gratuity Calculator
Gratuity is a statutory payment made by an employer when you leave after completing at least five years of continuous service. For establishments covered by the Payment of Gratuity Act, the amount is fixed by formula rather than negotiated - fifteen days of your last drawn salary for every completed year, computed on a 26-day month.
Gratuity formula
Gratuity = (15 x last drawn salary x years of service) / 26
- last drawn salary
- Monthly basic pay plus dearness allowance
- years of service
- Completed years; over six months counts as a full year
- 26
- Working days in a month under the Act
Employers not covered by the Act use a 30-day divisor instead of 26, which produces a lower figure for the same salary and tenure.
Using this calculator
- Enter your last drawn monthly basic salary plus dearness allowance.
- Enter completed years of service.
- Read the gratuity payable under the statutory formula.
Gratuity Calculator FAQs
When am I eligible for gratuity?
After five years of continuous service with the same employer. The five-year condition is waived if service ends due to death or disablement, in which case gratuity is payable regardless of tenure completed.
How are partial years counted?
A period beyond six months counts as a full year, and anything less is ignored. Ten years and seven months is treated as eleven years; ten years and four months is treated as ten.
Is gratuity taxable?
Government employees receive it fully exempt. For others covered by the Act, the exemption is the lowest of the statutory ceiling, the formula amount, or gratuity actually received. Anything above that is taxed at your slab rate.
Does gratuity include allowances beyond basic?
No. The formula uses basic salary plus dearness allowance only. House rent allowance, conveyance, bonus and other allowances are excluded, which is why gratuity is usually smaller than people expect from their CTC.
What if my employer refuses to pay?
Gratuity must be paid within thirty days of becoming due, with interest payable on delay. Disputes can be raised with the controlling authority appointed under the Payment of Gratuity Act in your state.
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Important: this calculator provides general information and arithmetic only. It is not personal financial, tax or investment advice. Projected returns are illustrations based on the rate you enter, not guarantees, and market-linked investments can fall in value. Verify current tax rates and scheme terms before acting, and consult a qualified adviser where the decision matters.