Gratuity Calculator
Calculate gratuity payable on resignation or retirement under the Payment of Gratuity Act, 1972 and the portion that is tax-free.
What is the Gratuity Calculator?
Gratuity is a lump sum employers pay employees who complete at least five years of continuous service (earlier in case of death or disability).
How does it work?
For employers covered by the Act, gratuity = 15 ÷ 26 × last drawn basic + DA × years of service, where a final part-year of 6 months or more counts as a full year. For employers not covered, 15 ÷ 30 and only completed years are used.
Formula
Covered: 15/26 × Salary × Years
Not covered: 15/30 × Salary × Completed years
Example
With ₹60,000 last drawn basic + DA and 10 years 7 months of service, 11 years count: 15/26 × 60,000 × 11 = ₹3,80,769.
Frequently asked questions
How much gratuity is tax-free?
For private-sector employees, up to ₹20 lakh over a career is exempt under Section 10(10).
Do I get gratuity if I resign after 4 years 8 months?
Several courts have held that 240 days of work in the fifth year counts as five years, so many employers pay it. Check your employer’s policy.
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