Gratuity Calculator (India)
Estimate your gratuity payout under the Payment of Gratuity Act.
Covered under the Payment of Gratuity Act?
What Is the Gratuity Calculator (India)?
Gratuity Calculator (India) Formula
Gratuity = (15 × Last Drawn Salary × Years of Service) ÷ 26
How Is the Gratuity Calculator (India) Calculated?
The formula uses 26 as the divisor (representing working days in a month) for employees covered under the Act, and 15 days' wages for each completed year of service. Employees not covered under the Act typically use a divisor of 30 instead. Service of 6 months or more in the final year is rounded up to a full year; less than 6 months is rounded down.
Gratuity Calculator (India) Example
An employee with a ₹50,000 last drawn salary and 7 years of service gets gratuity of (15 × 50,000 × 7) ÷ 26 = ₹2,01,923, well within the current ₹20 lakh tax exemption cap.
How to Use the Gratuity Calculator (India)
Step 1
Enter your last drawn Basic + DA salary per month.
Step 2
Enter your total years and any additional months of service.
Step 3
Select whether you're covered under the Payment of Gratuity Act (most private-sector employees are).
Step 4
Review your estimated gratuity payout.
Benefits
- Uses the exact statutory formula rather than a rough estimate.
- Automatically applies the standard 6-month rounding rule for the final year of service.
- Flags when your calculated gratuity exceeds the current tax-exemption cap.
Common Gratuity Calculator (India) Scenarios
Scenario 1
Estimating your full and final settlement amount before resigning or retiring.
Scenario 2
Financial planning around an expected gratuity payout.
Scenario 3
Checking whether your employer's gratuity calculation matches the statutory formula.
Understanding Your Result
The result is your estimated gratuity payout, capped at the current statutory exemption limit of ₹20,00,000 for private-sector employees. Amounts above this cap may still be paid by your employer but could be taxable beyond the exempt limit.
Tips
- Gratuity eligibility generally requires a minimum of 5 years of continuous service, except in cases of death or disability.
- Use your Basic + Dearness Allowance (DA) only — not your full CTC — for the salary figure.
- Confirm with your HR team whether your organization is covered under the Payment of Gratuity Act.
Common Mistakes
- Using full CTC instead of just Basic + DA in the salary field, which overstates the gratuity amount.
- Forgetting the 5-year minimum service eligibility rule before assuming gratuity is payable.
- Not rounding the final year correctly — 6+ months counts as a full additional year.
Frequently Asked Questions
Is there a minimum service period to be eligible for gratuity?
Yes, generally a minimum of 5 years of continuous service is required, except in cases of death or disability where this requirement is waived.
Is gratuity taxable?
Gratuity received by private-sector employees is exempt from tax up to ₹20,00,000 (the statutory cap); amounts above this may be taxable. Government employees typically have full exemption.
What's the difference between the 26 and 30 divisors?
Employees covered under the Payment of Gratuity Act use a divisor of 26 (representing a 26-day working month), while employees not covered under the Act typically use 30.
Does gratuity include HRA or other allowances?
No, the gratuity formula uses only Basic salary plus Dearness Allowance (DA), not your full CTC or other allowances.
What's the difference between the 26 and 30 divisors used in gratuity calculations?
The standard formula uses 26 (the typical number of working days in a month, excluding 4 Sundays), though some establishments — like seasonal factories — use a 30-day divisor per specific rules that apply to them.
Is there a maximum gratuity amount payable?
Yes — under the Payment of Gratuity Act, there's a statutory maximum cap that gets periodically revised by the government; amounts above the cap depend on employer discretion or specific employment terms.
What counts as 'last drawn salary' for this calculation?
It typically includes basic salary plus dearness allowance, but excludes other allowances like HRA, bonuses, or overtime — check your specific employment terms for exact composition.
Does gratuity apply if I resign versus being terminated?
Gratuity is generally payable regardless of whether employment ends by resignation, retirement, or termination, as long as the minimum eligible service period is met — though termination for specific misconduct can affect eligibility under some circumstances.
Is gratuity paid in addition to my final salary and other dues?
Yes — gratuity is a separate statutory benefit paid alongside other full-and-final settlement dues like unused leave encashment and notice pay, not a substitute for them.
Important Information
This tool provides an estimate based on the standard statutory formula and does not account for company-specific policies that may differ. Confirm exact figures with your HR or payroll department.
Last updated: July 26, 2026