Gratuity Calculator

Gratuity is a lump-sum payment made by an employer to an employee as a token of appreciation for the services rendered over a long period. In India, gratuity is governed by the Payment of Gratuity Act 1972, which applies to establishments with 10 or more employees. An employee becomes eligible for gratuity after completing 5 years of continuous service with the same employer. Gratuity is payable on retirement, resignation, death, or disablement. Our browser-based gratuity calculator computes the exact gratuity amount using the statutory formula and shows the tax-free and taxable portions.

1. Enter Your Salary: Input your last drawn monthly salary. For Act-covered employees, this should be Basic Salary + Dearness Allowance (DA). For government employees, it is the last drawn basic pay + DA.
2. Enter Service Duration: Input your years and additional months of continuous service. If the last year has more than 6 months, it is rounded up to a full year — the gratuity calculator handles this automatically.
3. Instant Browser-Based Calculation: Click Calculate Gratuity. The calculator applies the Payment of Gratuity Act formula entirely in your browser — your financial data is never sent to any server.

• For Act-Covered Employees:Gratuity = (Last Drawn Salary × 15 × Years of Service) ÷ 26. The divisor 26 represents the number of working days in a month (excluding Sundays). 15 represents 15 days' salary per year of service.
• For Government / PSU Employees: Gratuity = (Last Drawn Salary × 15 × Years of Service) ÷ 30. Government employees use 30 days per month instead of 26.
• Rounding of Service Years: If the last year of service exceeds 6 months, it is rounded up to a full year. For example, 10 years and 7 months is treated as 11 years.
• Tax Exemption:Gratuity received by Act-covered employees is tax-free up to ₹20 lakhs (as of FY 2024-25). Any amount above ₹20 lakhs is taxable as per the employee's income tax slab.

The minimum eligibility for gratuity under the Payment of Gratuity Act is 5 years of continuous service. Gratuity is also payable in case of death or disablement even before 5 years. The maximum gratuitypayable under the Act is ₹20 lakhs — amounts above this are at the employer's discretion. For employees not covered under the Act (establishments with fewer than 10 employees), gratuity may be paid as ex-gratia based on a private agreement. Always verify the exact amount with your HR department or a qualified professional.