Gratuity is a financial benefit paid by an employer to an employee as a token of appreciation for long-term service. It is governed by the Payment of Gratuity Act, 1972 and is usually paid when an employee resigns, retires, or becomes eligible after 
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A Gratuity Calculator is an online financial tool that helps employees determine the gratuity amount payable by their employer.
The calculator uses:
It applies the statutory formula prescribed under the Payment of Gratuity Act to compute the estimated payout.
Under the Gratuity Act:
If you have completed 5 years in an organization covered under the Act, you are generally eligible for gratuity.
For employers covered under the Payment of Gratuity Act, the standard formula used is:
Gratuity = (Last Drawn Salary × Years of Service × 15) / 26
Where:
Under the Act, employees are entitled to 15 days’ wages for each completed year of service. Since a working month is considered to have 26 days (excluding Sundays), the fraction 15/26 is applied to calculate proportional salary.
Let’s assume:
Since service exceeding 6 months is rounded up, it becomes 9 years.
Gratuity = (40,000 × 9 × 15) / 26
Gratuity ≈ ₹2,07,692
This is the estimated gratuity amount payable.
The gratuity calculation follows specific rounding rules:
Example:
As per current rules:
Using the calculator is simple:
The tool will display:
Many employees resign without realizing the gratuity amount they are entitled to receive. If you are close to completing 5 years of service, waiting a few months could significantly increase your payout.
Using the Gratuity Calculator helps you make informed career and financial decisions.
Gratuity is an important long-term employment benefit that should not be overlooked. Whether you are planning retirement or considering a job change, understanding your gratuity entitlement ensures better financial planning.
Use our Gratuity Calculator to estimate your payout and stay informed about your employment benefits.
The Gratuity Calculator is an online tool that helps employees estimate the gratuity amount they may receive from their employer based on their last drawn salary (Basic + DA) and total years of service.
For employees covered under the Payment of Gratuity Act, 1972, the gratuity is calculated using: Gratuity = Last Drawn Salary × Years of Service × (15/26) Where: Salary = Basic + Dearness Allowance 15 represents 15 days of salary per completed year 26 represents the number of working days in a month
Under the Gratuity Act, employees are entitled to 15 days’ wages for every completed year of service. Since a working month is considered to have 26 days (excluding Sundays), the fraction 15/26 is applied.
If the employee has worked: More than 6 months in the final year → it is rounded up to the next full year 6 months or less → it is rounded down For example, 8 years 7 months will be treated as 9 years.
Generally, an employee must complete at least 5 years of continuous service to be eligible for gratuity under the Act (subject to specific exceptions like death or disability).
Yes. The maximum statutory tax-exempt gratuity limit is ₹20 lakh under current rules.
No. Only Basic Salary and Dearness Allowance (DA) are considered for gratuity calculation. Other allowances are excluded.
In some cases, employers not covered under the Act may use a different calculation method (such as 15/30). However, most statutory calculations follow the 15/26 formula.
Gratuity received by employees covered under the Gratuity Act is tax-exempt up to the prescribed limit. Any amount exceeding the exemption limit may be taxable.
The calculator provides an estimate based on statutory formulas and user inputs. Actual payout may vary depending on employer policies and applicable legal provisions.
