Gratuity Calculator
Work out your gratuity under the Payment of Gratuity Act from your joining and leaving dates – with eligibility, service rounding and the tax-free limit explained.
- Joining and leaving dates
- Eligibility check
- Tax-free limit
- New labour code options
Calculated in your browser. Nothing is saved.
| Stay | Years counted | Basic + DA | Gratuity |
|---|
How to calculate gratuity
- Enter your salaryType your last drawn monthly basic salary and dearness allowance (DA). Leave DA empty if you don’t get it.
- Add your servicePick your joining and leaving dates, or type years and months. Choose whether your employer is covered by the Gratuity Act.
- Check eligibility and taxSee your gratuity, the formula, whether you qualify, the tax-free part and what it could grow to if you stay longer.
Gratuity examples
| Basic + DA | Service | Years counted | Gratuity (covered employer) |
|---|---|---|---|
| ₹30,000 | 5 years | 5 | ₹86,538 |
| ₹50,000 | 7 years 7 months | 8 | ₹2,30,769 |
| ₹50,000 | 7 years 6 months | 7 | ₹2,01,923 |
| ₹1,00,000 | 20 years | 20 | ₹11,53,846 |
Why 15 and 26?
The Act pays 15 days’ wages for every year of service. A month is taken as 26 working days (excluding four Sundays), so one day’s wage is monthly wages ÷ 26, and 15 days’ wages is monthly wages × 15 ÷ 26 – about 57.7% of a month’s basic + DA per year.
This calculator gives an estimate for planning. Your employer’s policy, court rulings and the latest notifications under the labour codes decide the final amount.
Frequently asked questions
How is gratuity calculated?
For employers covered by the Payment of Gratuity Act: gratuity = last drawn monthly (basic + DA) × 15 ÷ 26 × years of service. For example, ₹50,000 × 15 ÷ 26 × 10 years = ₹2,88,462. Employers not covered by the Act use 30 instead of 26 and count only completed years.
How are years of service rounded?
Under the Act, if you work more than six months in your final year, it counts as a full year. So 6 years 7 months counts as 7 years, but 6 years 6 months counts as 6 years.
Who is eligible for gratuity?
Employees who complete at least 5 years of continuous service with the same employer, when they resign, retire or are laid off. The 5-year condition doesn’t apply on death or disablement. Under the new labour codes, fixed-term employees qualify after one year.
Does 4 years and 240 days count as 5 years?
Several High Court judgments have treated 4 years and 240 days of work as 5 years of continuous service, but employers don’t always accept it. The calculator shows this case as “possibly eligible”.
How much gratuity is tax-free?
For government employees, all of it. For others, the tax-free part is the lowest of the gratuity received, ₹20 lakh, and the formula amount. Anything above is added to your income and taxed at your slab rate.
What is the 50% wage rule?
Under the new labour codes, if allowances make up more than half of your total pay, the excess is added to “wages” for gratuity. Tick the option and enter your total monthly pay to see the effect – it raises gratuity for people with a low basic salary.
Is there a maximum gratuity amount?
The Act caps gratuity at ₹20 lakh for private-sector employees. Employers can pay more voluntarily, but amounts above ₹20 lakh are taxable.
When is gratuity paid?
The employer must pay within 30 days of it becoming payable. If they delay, they have to pay simple interest on the amount.
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