Gratuity Calculator
Estimate your gratuity payout under the Payment of Gratuity Act, 1972 — based on your last drawn Basic + DA and total years of service.
Your estimated gratuity
₹2,01,923
How gratuity is calculated in India
For employees covered under the Payment of Gratuity Act, gratuity is calculated as (15 × last drawn salary × completed years of service) ÷ 26, where the last drawn salary is your monthly Basic + Dearness Allowance, and a part-year of more than six months rounds up to a full year.
For employees at establishments not covered under the Act (or covered by an employer's own gratuity scheme), the common convention instead uses a 30-day divisor — (15 × last drawn salary × completed years of service) ÷ 30 — and only full completed years count, without the 6-month rounding rule. Exact terms can vary by employer policy in this case.
Gratuity becomes payable after 5 years of continuous service (waived for death or disablement) and is exempt from income tax up to ₹20,00,000.
Frequently asked questions
How is gratuity calculated in India?⌄
For employees covered under the Payment of Gratuity Act: Gratuity = (15 × last drawn salary × completed years of service) ÷ 26, where last drawn salary is Basic + Dearness Allowance per month. Gratuity is payable after 5 years of continuous service and is capped at ₹20,00,000.
What changes if my employer is not covered under the Act?⌄
Employees at establishments not covered under the Payment of Gratuity Act (or covered by an employer's own scheme) are commonly paid using a 30-day divisor instead of 26, and only full completed years count — without the 6-month rounding rule. Exact terms can vary by employer policy in this case.
Who is eligible for gratuity?⌄
An employee becomes eligible for gratuity after completing 5 years of continuous service with the same employer. The 5-year rule is waived in case of death or disablement.
Is gratuity taxable?⌄
For employees covered under the Payment of Gratuity Act, gratuity up to ₹20 lakh is exempt from income tax. Any amount above the exemption limit is taxable as per your income tax slab.
Disclaimer: These calculators provide indicative estimates for FY 2025-26 based on standard statutory rules and the inputs you enter. Actual figures depend on your salary structure, state, applicable exemptions and the latest government notifications. Please consult a qualified payroll or tax professional before making decisions.