Gratuity calculator
Find out how much gratuity you can expect when you leave a job. Enter your last drawn salary and your years of service. Nothing you type leaves your browser.
Your details
Enter your salary and years of service as numbers, zero or above.
What is gratuity?
Gratuity is a lump sum an employer pays when an employee leaves after long service, whether through resignation, retirement or other exit. In India it is governed by the Payment of Gratuity Act, 1972. It works as a retirement benefit, and you receive it on top of your final salary and any notice-period dues.
How gratuity is calculated
For employees covered by the Act, gratuity is 15 days of wages for every completed year of service. A month is taken as 26 working days.
Last salary means basic pay plus dearness allowance. If your employer is not covered by the Act, the usual method divides by 30 instead of 26.
How part-years are counted
A part of a year of more than six months counts as a full year. Seven years and seven months is treated as eight years. Seven years and six months stays at seven.
Is gratuity taxable?
- Government employees: fully exempt.
- Private-sector employees: exempt up to the least of the gratuity actually received, the formula amount, and ₹20,00,000.
Any amount above the exempt limit is added to your salary income and taxed at your slab rate. This calculator shows the tax-free and taxable split against the ₹20 lakh limit. Tax rules change, so check the current rules or ask your accountant before you file.
Frequently asked questions
Who is eligible for gratuity?
An employee is normally eligible after five years of continuous service with the same employer. The five-year condition is waived when the employment ends because of death or disability.
What salary is used to calculate gratuity?
The last drawn monthly basic salary plus dearness allowance. Other allowances, bonuses and overtime are not counted.
Why is the divisor 26 and not 30?
The Payment of Gratuity Act treats a month as 26 working days for covered employees, so 15 days of wages is 15/26 of a month. For employees outside the Act, 30 days is normally used.
Is gratuity taxable?
Gratuity for government employees is fully exempt. For private-sector employees it is exempt up to the least of the amount received, the formula amount, and 20 lakh rupees. Anything above that is taxed as salary income.
How are extra months counted?
A part of a year of more than six months is counted as a full year. Six months or less is ignored.
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This calculator gives an estimate for information only. It is not legal or tax advice. Your employer's policy and the current law decide the final amount.