Gratuity Calculator
Calculate your Gratuity amount.
Monthly Basic Salary + DA
Years of Service
Gratuity Amount
₹86,538
Gratuity Calculator – Employee Benefit helper
Gratuity is a monetary benefit given by an employer to an employee for rendering services for five or more years.
The Gratuity Calculator helps you estimate the amount you are eligible to receive upon exit or retirement.
What is a Gratuity Calculator?
It calculates the gratuity payable under the Payment of Gratuity Act, 1972.
It applies to establishments with 10 or more employees.
How does this Gratuity Calculator work?
The calculator uses the following formula:
G = (15 * Last Drawn Salary * Years of Service) / 26
- Last Drawn Salary = Basic + DA.
- 15 days of wages for every completed year.
- Divided by 26 working days in a month.
How to use this Gratuity Calculator effectively
- Enter your last drawn Basic Salary + DA.
- Enter total years of continuous service.
- The calculator displays the gratuity amount.
Commonly asked questions
What is Gratuity?
Gratuity is a monetary benefit given by an employer to an employee for services rendered, usually upon retirement or exit.
Who is eligible?
Employees who have completed at least 5 years of continuous service are eligible.
What is the formula?
Gratuity = (15 * Last Drawn Salary * Tenure) / 26.
Why 15/26?
15 days of salary for every completed year of service, considering 26 working days in a month.
Is there a limit?
The maximum tax-exempt gratuity limit is ₹20 Lakhs. Employers can pay more, but the excess is taxable.
What happens if I work less than 5 years?
Generally, you are not eligible. Exception: In case of death or disablement, the 5-year rule does not apply.
Is gratuity taxable?
For government employees, it is fully tax-free. For others, it is tax-free up to ₹20 Lakhs.
Does "Salary" include allowances?
For gratuity, salary means Basic + Dearness Allowance (DA). It excludes HRA, bonus, etc.
What if tenure is 5 years 7 months?
If the fraction is more than 6 months, it is rounded off to the next year (i.e., 6 years). Less than 6 months is ignored.
Is it mandatory for employers?
Yes, for establishments with 10 or more employees, paying gratuity is mandatory under the Act.
When is it paid?
It is paid upon resignation, retirement, or termination after 5 years of service.
Can an employer refuse to pay?
No, unless the employee was terminated for riotous or disorderly conduct or an offence involving moral turpitude.
What about contract employees?
Contract employees are also eligible if they meet the 5-year criterion.
Is nomination necessary?
Yes, employees should file a nomination (Form F) to ensure payment to heirs in case of death.
What happens in case of death?
Gratuity is paid to the nominee/heir. The amount depends on the length of service.
Can I calculate gratuity for private sector?
Yes, the formula applies to both public (non-govt) and private sector employees covered under the Act.
What if not covered by the Act?
Employees not covered by the Act can still receive gratuity if the employer allows, but the calculation formula may differ (e.g., 15/30).
Is gratuity part of CTC?
Yes, employers often include the annual provision for gratuity in the Cost to Company (CTC).
How to claim gratuity?
Submit an application to the employer within 30 days of it becoming payable.
Is interest paid on delay?
Yes, if not paid within 30 days, simple interest must be paid by the employer.