Gratuity calculator

How to use this tool

1. Enter your last drawn monthly salary (basic plus dearness allowance).
2. Enter your years and months of service.
3. Choose whether your employer is covered by the Act (15/26) or not (15/30).
4. Read the gratuity amount and check it against the tax-free limit.

How it works

Covered by the Act: gratuity = last drawn (basic + DA) × 15 ÷ 26 × years of service
Not covered: gratuity = last drawn (basic + DA) × 15 ÷ 30 × completed years

For covered employers, a part of a year beyond six months counts as a full year, so 8 years 7 months is counted as 9 years. For others only completed years count. 26 is the number of working days in a month, 15 is half a month's pay for each year.

Good to know

Under the Payment of Gratuity Act in India, gratuity is paid on leaving after five years of continuous service, or on death or disablement. For covered employers it is 15 days of salary for each completed year, calculated as last drawn salary × 15 ÷ 26 × years of service. Service of more than six months in the last year is rounded up.

Gratuity up to the limit set by the government is exempt from income tax for most private employees. The limit and the rules change, so check the current figures with your employer, HR team or a tax adviser. This calculator gives an estimate and is not tax or legal advice.