Labor Laws & Finance Utility

Gratuity Calculator India

Accurately estimate your retirement or resignation gratuity payout based on the Payment of Gratuity Act, 1972.

Formula: 15 working days out of 26 days per completed service year.

₹
Your last drawn monthly basic pay
₹
Enter 0 if DA is not part of your CTC
Minimum 5 continuous years required
6+ months round up to 1 extra year (Covered)

What is Gratuity in India?

Gratuity is a statutory monetary benefit provided by an employer to an employee in recognition of their continuous service. Governed by the Payment of Gratuity Act, 1972, it applies to every factory, mine, oilfield, plantation, port, railway company, shop, or establishment employing 10 or more people.

1 Covered Employees (15/26 Formula)

For organizations covered under the Act, 1 month of work is legally considered as 26 working days. Gratuity is calculated at the rate of 15 days' salary for every completed year of service. If additional service exceeds 6 months, it is rounded up to the next full year.

2 Non-Covered Employees (15/30 Formula)

For employees not covered under the Act, the month is taken as 30 calendar days. Fractions of months are not rounded up; only full, completed years of service are considered.

Frequently Asked Questions

Is 5 years mandatory for gratuity eligibility?

Yes, under Section 4(1) of the Act, an employee must complete at least 5 years of continuous service with an organization. The 5-year condition is waived only if employment terminates due to death or disablement.

What is the maximum tax-free gratuity limit?

Under current Indian tax provisions, the maximum tax-free gratuity exemption limit for non-government employees is ₹20,00,000 (₹20 Lakhs). Any excess gratuity received is taxable as per your income tax slab.

Are HRA and other allowances included in the gratuity calculation?

No. Gratuity is strictly calculated on Basic Salary + Dearness Allowance (DA). Special allowance, HRA, bonuses, and commission are excluded.