Free Gratuity Calculator
Work out the gratuity due when you leave a job. Enter your last drawn salary and length of service, choose whether your employer is covered by the Payment of Gratuity Act, and see the amount, the formula and the tax-free part.
Most employers with ten or more employees are covered. A month counts as 26 working days, and a part year over six months rounds up.
For 10 years counted, about ₹2.88 L
Formula
15 × ₹50,000 × 10 ÷ 26
= ₹2,88,462
- Salary (Basic + DA)
- ₹50,000 / mo
- Years counted
- 10
- Tax-free portion
- ₹2,88,462
- Gratuity payable
- ₹2,88,462
This gratuity is fully tax-free. Private sector gratuity is exempt up to ₹20 lakh in your lifetime.
An estimate using the standard formula under the Act. Confirm the final figure with your employer, since policies and salary definitions can vary.
Work out your gratuity in four steps.
Enter your salary and service, pick your coverage, and read the gratuity amount with the exact formula it used. Everything updates as you move the sliders.
Enter your salary
Put in your last drawn monthly salary, meaning basic pay plus dearness allowance. Allowances like HRA do not count towards gratuity.
Add your service
Set how long you have worked there, in years and months. The months matter, because a part year over six months counts as a full year.
Pick covered or not
Choose whether your employer is covered by the Payment of Gratuity Act. Covered employers divide by 26 working days, others by a 30 day month.
Read your gratuity
See the gratuity amount, the exact formula it used, and how much of it is tax-free. Copy the full breakdown in one tap.
How gratuity is worked out.
The formula turns on one thing: whether your employer is covered by the Act. That decides the divisor and how the years are counted.
Covered by the Act
Applies to most establishments with ten or more employees. A month is treated as 26 working days, and a part year of more than six months rounds up to a full year.
Not covered by the Act
For employees outside the Act. It uses a full 30 day month, and only whole completed years count, so a part year is dropped rather than rounded up.
What salary means
Salary here is your basic pay plus dearness allowance, and commission when it is a fixed share of turnover. HRA, bonus and other allowances are left out.
Eligibility, rounding and tax.
A few rules decide who gets gratuity, how much, and how it is taxed. Here are the ones that matter most.
Five years of service
Gratuity is usually payable only after five years of continuous service. The five year rule is waived when service ends because of death or disablement.
Rounding the years
For an employer covered by the Act, a part year of more than six months counts as a whole year. Six months or less is dropped. Employers not covered count only whole years.
The ₹20 lakh ceiling
The most an employer must pay under the Act is ₹20 lakh. An employer can choose to pay more, but the extra is voluntary and sits outside the Act.
Tax on gratuity
For private sector employees, gratuity is tax-free up to ₹20 lakh across your working life. Government employees are fully exempt. Anything above the limit is taxable.
Who pays it
The employer pays gratuity from its own funds or a group gratuity policy. It is never deducted from your salary, and it is separate from your provident fund.
When it is paid
Gratuity falls due when you leave after qualifying service, whether by retirement, resignation, death or disablement. The employer should pay it within 30 days.
Gratuity by length of service
On a last drawn salary of ₹50,000 a month (Basic + DA), for an employer covered by the Act.
| Years of service | Gratuity |
|---|---|
| 5 years | ₹1,44,231 |
| 10 years | ₹2,88,462 |
| 15 years | ₹4,32,692 |
| 20 years | ₹5,76,923 |
| 25 years | ₹7,21,154 |
Payroll and settlements, off your plate.
Gratuity is one line of a full and final settlement. Running payroll, provident fund, leave, TDS and exits for a whole team, month after month, is the real work. That is the kind of HR and payroll software we build at Techliphant, shaped around how your organisation runs.
Making a salary slip? Try the payslip generator.
Common gratuity questions.
It is a free online tool that works out the gratuity due to an employee under the Payment of Gratuity Act, 1972. You enter your last drawn monthly salary and how long you have worked, and it shows the gratuity amount, the formula it used, and how much of it is tax-free.
For an employer covered by the Act, gratuity is 15 × last drawn monthly salary × years of service ÷ 26, where salary means basic pay plus dearness allowance and 26 is the number of working days in a month. For example, on ₹50,000 a month and 10 years of service, gratuity is 15 × 50,000 × 10 ÷ 26, which is about ₹2,88,462.
An employer with ten or more employees is usually covered by the Payment of Gratuity Act and uses a 26 day month, so the formula divides by 26. An employer outside the Act uses a full 30 day month and divides by 30, and counts only whole completed years. The tool lets you switch between the two.
An employee becomes eligible after completing five years of continuous service with the same employer, and it is paid on retirement, resignation or superannuation. The five year condition is waived if service ends due to death or disablement, in which case the gratuity is paid to the employee or the nominee.
For an employer covered by the Act, a part year of more than six months is rounded up to a full year, and six months or less is dropped. So 10 years and 7 months counts as 11 years, while 10 years and 4 months counts as 10 years. Employers not covered by the Act count only whole completed years.
The last drawn salary, which for gratuity means basic pay plus dearness allowance, and commission where it is a fixed percentage of turnover. Other parts of your pay, such as HRA, bonus and overtime, are not included in the gratuity calculation.
For private sector employees, gratuity is tax-free up to a lifetime limit of ₹20 lakh, and anything above that is added to your income and taxed. Government employees receive gratuity fully tax-free. This calculator shows the tax-free portion and any taxable excess.
Under the Payment of Gratuity Act, the most an employer must pay is ₹20 lakh. An employer may choose to pay more as an ex-gratia amount, but that extra is not required by the Act. For central government employees the ceiling is higher, at ₹25 lakh.
Usually not. Gratuity needs five years of continuous service, so leaving earlier means no gratuity in most cases. The exception is when employment ends because of death or disablement, where the five year rule does not apply. Some rulings also treat a year as complete at 240 working days.
No. Gratuity is paid by the employer from its own funds or a group gratuity policy, on top of your salary. It is not deducted from your pay and it is separate from your provident fund and your pension.
Yes on both. It is free, there is no sign-up, and it runs entirely in your browser. Nothing you type is sent anywhere or stored, so your salary and service details stay on your own device.
It will be very close. This tool uses the standard formula under the Payment of Gratuity Act. Small differences can come from how your employer defines salary, how it rounds the service, or a more generous policy than the Act requires. Confirm the final figure with your employer or a tax adviser.
Private by design: this calculator runs entirely in your browser, so nothing you type is uploaded or stored. It is provided free for estimates and educational use, and it is not legal or tax advice. Confirm your gratuity and its tax treatment with your employer or a qualified adviser before you rely on it.
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