Gratuity Calculator
Gratuity is a lump sum your employer pays for long service, payable once you complete five continuous years. It's calculated from your last drawn basic salary (plus dearness allowance) and how long you stayed.
The statutory formula is fixed: 15 days' wages for every completed year, worked out on a 26-day month. The tax-free amount is capped at ₹20 lakh.
Based on 15 days' pay per completed year on a 26-day month. Payable after 5 years of continuous service.
How it works
- 01Gratuity = last salary × 15 ÷ 26 × years of service.
- 02The 26 reflects a standard working month; the 15 is a fortnight of pay per year served.
- 03Anything above the ₹20 lakh statutory cap is tax-free only up to the cap; the excess is at employer discretion and taxable.
Frequently asked
When am I eligible for gratuity?+
After five years of continuous service with the same employer. Some exceptions apply for death or disablement, where the five-year requirement is waived.
Is gratuity taxable?+
For employees covered by the Payment of Gratuity Act, it is tax-free up to ₹20 lakh across your career. Amounts beyond that are added to income and taxed.