Gratuity Calculator

Calculate your estimated gratuity amount payable by your employer upon exit.

Employment Details

Includes Basic Pay and Dearness Allowance (DA) only. Excludes HRA, transport, etc.
You must have completed at least 5 years of continuous service with the same employer.
Most established companies are covered under the Act. Gratuity up to ₹20 Lakhs is tax-free.

Your Estimated Gratuity

Total Gratuity Payable

₹ 2,01,923

Based on 8 calculated years of service.

Understanding Gratuity Calculation in India

If Covered Under the Gratuity Act

For employees covered under the act, gratuity is calculated at 15 days of wages for each completed year of service. The month is considered to have 26 working days. If you work for more than 6 months in your final year, it is rounded up to a full year.

Gratuity = (Basic + DA × 15 × Years) ÷ 26

Example: Basic+DA ₹50,000, 10 years → (50,000 × 15 × 10) ÷ 26 = ₹2,88,462

If NOT Covered Under the Act

Even if not covered under the Act, an employer can pay gratuity. Gratuity is calculated at half a month's salary for each completed year of service. The month is considered to have 30 days. No rounding up is allowed for partial years.

Gratuity = (Basic + DA × 15 × Years) ÷ 30

Example: Basic+DA ₹50,000, 10 years → (50,000 × 15 × 10) ÷ 30 = ₹2,50,000

Key Rules

  • 5-Year Rule: You must have exactly 5 years of continuous service. If you resign at 4 years and 11 months, you are not legally eligible for gratuity.
  • Tax Exemption: Gratuity received up to ₹20 Lakhs is exempt from Income Tax. Any amount above this limit is taxable as per your slab rate.
  • Salary Context: Ensure you input ONLY Basic Salary + Dearness Allowance. Do not input your Gross Salary.

Gratuity Amount Reference Table

Estimated gratuity (covered under Act) at different Basic+DA levels and years of service. Useful for retirement planning.

Basic + DA / Month5 Years10 Years15 Years20 Years30 Years
₹20,000₹57,692₹1,15,385₹1,73,077₹2,30,769₹3,46,154
₹30,000₹86,538₹1,73,077₹2,59,615₹3,46,154₹5,19,231
₹50,000₹1,44,231₹2,88,462₹4,32,692₹5,76,923₹8,65,385
₹75,000₹2,16,346₹4,32,692₹6,49,038₹8,65,385₹12,98,077
₹1,00,000₹2,88,462₹5,76,923₹8,65,385₹11,53,846₹17,30,769
₹1,50,000₹4,32,692₹8,65,385₹12,98,077₹20,00,000*₹20,00,000*

* Capped at ₹20 Lakhs (tax-exempt limit). Any amount above ₹20L is taxable.

Gratuity vs EPF vs Leave Encashment

FeatureGratuityEPFLeave Encashment
Eligibility5+ years serviceFrom Day 1As per policy
Who ContributesEmployer onlyBothEmployer only
Rate15/26 per year12%+12%Basic ÷ 26
Tax ExemptionUp to ₹20LAfter 5 yrsUp to ₹25L (Govt)
On Death5-yr rule waivedNominee getsPaid to nominee
Max Limit₹20 LakhsNo max₹25L (Govt only)
When Can Employer Forfeit Gratuity?

Termination for riotous or violent conduct during employment

Conviction for offenses involving moral turpitude

Willful damage to employer's property (forfeiture limited to extent of damage)

Resignation, retirement, retrenchment — full gratuity must be paid

How Gratuity Appears in Your CTC

Most employers show gratuity as part of CTC at 4.81% of Basic Salary (= 15/26 × 1 year ÷ 12 months). On a ₹50,000/month basic, that's ₹2,404/month shown in CTC. You will receive this only after 5 years — employees who leave earlier effectively have a lower real CTC than stated.

Gratuity as % of Basic

4.81%

per year of service

Frequently Asked Questions

Any employee who has completed 5 or more years of continuous service is eligible for gratuity. This applies to establishments with 10 or more employees. In case of death or disability, the 5-year condition is waived and gratuity is paid to the nominee.
Gratuity = (Last Drawn Basic + DA) × 15 × Years of Service ÷ 26. For example, if basic + DA is ₹50,000 and you've worked 10 years: Gratuity = 50,000 × 15 × 10 ÷ 26 = ₹2,88,462. For companies not covered under the Act, 30 is used instead of 26.
Gratuity received on retirement/resignation is tax-exempt up to ₹20 lakh (for government employees, it's fully exempt). For employees covered under the Payment of Gratuity Act, the least of the following is exempt: actual gratuity received, ₹20 lakh, or 15 days salary × years of service.
Yes, most companies include gratuity at 4.81% of basic salary in CTC. However, you only receive it after completing 5 years. If you leave before 5 years, the company retains the gratuity amount, effectively reducing your actual CTC. On a ₹50,000/month basic, that's ₹2,404/month.
No, paying gratuity is a legal obligation under the Payment of Gratuity Act, 1972. Employers can only forfeit gratuity if the employee is terminated for riotous or violent behavior, or for offenses involving moral turpitude during employment. Partial forfeiture is allowed for willful property damage.
In case of death or permanent disability due to accident or illness, the 5-year minimum service condition is completely waived. Gratuity is calculated for actual years served and paid to the nominee or legal heir. For partial disability, gratuity is still payable on resignation.
For companies covered under the Payment of Gratuity Act: 26 working days per month is used (excluding Sundays), and months >6 are rounded up to a full year. For companies NOT covered: 30 calendar days per month is used, and only fully completed years count — no rounding of partial years.
Yes. The maximum gratuity that is tax-exempt is ₹20 Lakhs. Any gratuity amount above ₹20 Lakhs is added to your income and taxed as per your income tax slab. The ₹20 Lakh limit was last revised in 2018 (from the earlier ₹10 Lakh limit). For government employees, the entire gratuity is exempt.
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