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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.

Formula: (15 × Last Drawn Basic Salary × working tenure) / 26
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.

Formula: (15 × Last Drawn Basic Salary × working tenure) / 30

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.

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.
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.
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 (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.
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.