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Gratuity Calculator

How much gratuity you’ll get when you leave — with the formula, the rounding and the tax worked out.

Runs in your browser Free · no sign-up

At a glance

  • Uses the legal formula — 15 × last monthly basic + DA × years ÷ 26 — and shows it with your numbers.
  • Counts years the way the law does: a part year of more than six months counts as a full year.
  • Checks eligibility: five years of service, except on death or disablement, and one year for fixed-term employees under the labour codes.
  • Applies the ₹20 lakh maximum and splits the amount into tax-free and taxable parts — fully tax-free for government employees.
  • Optionally applies the labour codes’ 50% wage rule, which raises the wages used for gratuity when allowances are more than half of your pay.
  • Also works for employers not covered by the Act (half a month’s wages per completed year), and shows what you’d get after more years.

Step by step

How to calculate gratuity

  1. 1

    Enter your wages

    Your last monthly basic pay plus dearness allowance.

  2. 2

    Enter your service

    Years and months, or your date of joining and last working day.

  3. 3

    Choose the situation

    Whether your employer is covered by the Act, why you are leaving, and whether you are a government employee.

  4. 4

    Read the result

    The gratuity, the years counted, the formula with your numbers, and the tax-free part.

Features

Everything you need, nothing you don’t

Legal formula

15/26 under the Act, 15/30 otherwise.

Correct rounding

More than six months counts as a year.

Eligibility check

5 years, death, and fixed-term staff.

Tax split

Tax-free up to ₹20 lakh; all of it for government staff.

Labour codes

The 50% wage rule, optional.

Dates or years

Enter your joining and leaving dates or the service.

The gratuity formula

Gratuity = 15 × last drawn monthly wages × years of service ÷ 26. “Wages” means basic pay plus dearness allowance. The 15 stands for fifteen days’ wages per year and the 26 for the working days in a month. With wages of ₹50,000 and 10 years’ service: 15 × 50,000 × 10 ÷ 26 = ₹2,88,462. If your employer isn’t covered by the Act, gratuity is usually half a month’s wages per completed year: 50,000 × 10 ÷ 2 = ₹2,50,000.

How years of service are counted

ServiceYears counted (covered by the Act)
6 years 5 months6
6 years 6 months6
6 years 7 months7
4 years 11 monthsNot eligible yet (needs 5 years)

The new labour codes

The Code on Social Security, 2020, which replaces the Payment of Gratuity Act under the new labour codes, keeps the same formula. It lets fixed-term employees get gratuity after one year, and the definition of wages means allowances above half of your total pay count as wages — so a low basic salary can no longer shrink your gratuity. Check your employer’s policy for how it applies these rules.

FAQ

Frequently asked questions

Who is eligible for gratuity?

Employees with at least five years of continuous service with the same employer, on resignation, retirement or termination. On death or disablement the five-year rule does not apply, and fixed-term employees qualify after one year.

Do I get gratuity after 4 years and 240 days?

Some High Courts have held that working at least 240 days in the fifth year completes five years of continuous service. Employers don’t all follow this, so check your company’s policy.

Is gratuity taxable?

For government employees it is fully tax-free. For others it is tax-free up to ₹20 lakh in a lifetime (or the formula amount, if lower); anything above is taxed as salary.

What is the maximum gratuity?

Under the law, ₹20 lakh. An employer can choose to pay more, but the amount above ₹20 lakh is taxable.

Which salary is used — basic or gross?

Basic pay plus dearness allowance. Under the labour codes, if your allowances are more than half of your total pay, the excess is added — turn on the 50% rule to see the effect.

When must gratuity be paid?

Within 30 days of it becoming payable. If it is late, the employer must pay simple interest on it.

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