Gratuity Calculator (India)
Work out the gratuity payable on retirement or resignation under the Payment of Gratuity Act, 1972 — enter your last drawn basic + DA and years of service to get the exact payout.
What is gratuity in India?
A gratuity calculator (India) tells you how much you will receive as a one-time payment when you leave a job after long service, as governed by the Payment of Gratuity Act, 1972. Gratuity is a statutory benefit funded by the employer and paid in recognition of years of continuous service. It is payable when you retire, resign after completing the qualifying period, or when your service ends due to death or permanent disablement.
The law sets a specific formula: multiply your last drawn basic salary plus dearness allowance (DA) by your completed years of service, then multiply by 15/26 to reflect 15 days of wages for every worked year. Because 26 working days are treated as one month, that ratio converts a monthly wage into the number of days owed. This calculator applies exactly that statutory formula — including the rounding of service of six months or more to a full year — so you can estimate your payout accurately before you resign or retire. There is also a statutory ceiling on the amount payable under the Act, and a separate income-tax exemption limit under Section 10(10) that may apply.
How to use
- Enter your last drawn basic salary + DA.
- Enter your total years of continuous service — decimals like 9.5 work too.
- Click Calculate Gratuity to see the payout and completed years.
- Read the formula in the result to see how the figure was derived.
How gratuity is calculated
Gratuity = (Last drawn Basic + DA) × Completed Years × 15 ÷ 26 Completed Years = rounded up when the balance is 6 months or more
The formula comes from the Payment of Gratuity Act, 1972, and the 15/26 factor represents 15 days of last drawn wages for each completed year of continuous service.
Example
With the defaults — ₹50,000 as last drawn basic + DA and 5 years of service — the completed years are 5 and the gratuity is ₹1,44,230.77 (calculated as (₹50,000 × 5 × 15) / 26). Change the years to 4.7 and the calculator rounds service up to 5 years, so the payout stays the same. Lower it to 4.4 years and the gratuity drops, since service below six months is not counted as a full year.
Common use cases
- Plan a career move: estimate the gratuity you will receive before you resign.
- Retirement planning: add the lump sum to your retirement corpus.
- Check employer calculation: verify the payout quoted in your offer letter or exit settlement.
- Tax planning: compare the payout against the ₹20 lakh exemption under Section 10(10).
Pro tips
- Only basic + DA counts: HRA, special allowance, bonus and other perks are excluded from the gratuity wage base.
- Watch the 6-month rule: service of six months or more rounds up to a full year, which can change your payout.
- Know the ceiling: the statutory maximum is ₹20 lakh under the Payment of Gratuity Act.
- Check the exemption: gratuity is exempt from tax up to ₹20 lakh under Section 10(10) for employees covered by the Act.
FAQ
What is gratuity in India?
Gratuity is a one-time lump-sum payment made to an employee under the Payment of Gratuity Act, 1972 in recognition of long service. It is payable on retirement, resignation after completing at least 5 years, superannuation, death or disablement.
How is gratuity calculated?
Gratuity = (Last drawn basic + DA) × completed years of service × 15 / 26. The 15/26 factor reflects 15 days of wages per completed year, based on a 26-working-day month.
What is the 15/26 rule?
The rule pays 15 days of last drawn wages for every completed year of continuous service, expressed as 15/26 because 26 working days are treated as a month in India.
What is the maximum gratuity limit?
The maximum statutory gratuity payable was raised to ₹20 lakh from ₹10 lakh under the Payment of Gratuity Act, 1972.
Which salary is used?
The last drawn basic salary plus dearness allowance (basic + DA). Other allowances like HRA, conveyance and bonus are excluded.
How are years of service rounded?
Completed years of continuous service are rounded up when the balance exceeds six months; 4 years 7 months is treated as 5 years.
Is gratuity taxable?
Gratuity is taxable under Salaries but exempt up to ₹20 lakh under Section 10(10) of the Income Tax Act for employees covered by the Payment of Gratuity Act.
Who is eligible for gratuity?
An employee is eligible after at least 5 years of continuous service in a covered establishment. The 5-year condition is waived on death, permanent disablement or certain termination.
Is gratuity paid on resignation?
Yes, if you resign after completing the required 5 years of continuous service the gratuity becomes payable, typically within 30 days of resignation.
Is this gratuity calculator free?
Yes. It runs entirely in your browser and no data is uploaded anywhere.
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