Gratuity Calculator

Gratuity Calculator – Preview

Enter your last drawn pay and years of service to see the amount payable, the ₹20 lakh tax-free limit, and any taxable portion above it.

The formula uses last drawn Basic + Dearness Allowance only, for employees covered under the Act.
6 or more months in the final year generally rounds up to a full year for gratuity purposes.
Death gratuity applies government-style DCRG slabs; private employers may instead use the standard formula with the tax-free cap.

Gratuity result

Years counted for formula–
Pre-cap gratuity (before ₹20L limit)₹0
Maximum tax-free limit₹20,00,000
Taxable portionabove ₹20L₹0
Final gratuity payable
₹0

Gratuity received after 29 Mar 2018 is tax-exempt up to ₹20,00,000 total across all employers in your career; any excess is taxable as per your income slab.

How the formula works

Gratuity = Last salary × (15 ÷ 26) × Completed years of service
  • Last salary means Basic + DA, and certain fixed commission where applicable
  • 15 ÷ 26 represents 15 days’ wages, based on a 26-day working month
  • 6 or more months of service in the final year rounds up to a full year

Eligibility and tax rules

Eligibility

  • Generally requires 5 years of continuous service
  • The 5-year rule doesn’t apply in case of death or disablement
  • Applies to employees covered under the Payment of Gratuity Act

Tax treatment

  • Exempt up to ₹20,00,000 across your entire career
  • The limit is combined across all employers, not per job
  • Amounts above your remaining exemption are taxed at your slab rate

Frequently asked questions

Am I eligible for gratuity if I resign before 5 years?

Statutory gratuity is generally payable only after 5 years of continuous service, except in cases of death or disablement, where the 5-year requirement doesn’t apply.

Is gratuity taxable?

Gratuity received on or after 29 March 2018 is tax-exempt up to ₹20,00,000 across your entire career, combined over all employers. Anything above your remaining exemption is taxed as per your income slab.

What counts as “last drawn salary” for the formula?

For covered employees, it’s your last drawn Basic pay plus Dearness Allowance, and certain fixed commission where applicable — not HRA, bonus, or other variable allowances.

How is death gratuity calculated differently?

Government-style death-cum-retirement gratuity (DCRG) uses service-length slabs instead of the 15/26 formula, with the multiple of salary rising as completed service increases, up to the same ₹20,00,000 cap.

Does this calculator apply to all employees?

It models the common cases under the Act. Government employees and staff not covered by the Act can have different formulas or ceilings, so confirm specifics with your employer’s HR or a tax advisor.

This calculator gives an estimate for planning purposes only. It isn’t tax or legal advice — confirm your exact entitlement with your employer’s HR or a qualified advisor.

Free online Gratuity Calculator for India that estimates retirement or death gratuity using last drawn basic + DA, years of service and the 15/26 formula, with ₹20 lakh tax‑free limit and taxable amount breakdown. Gratuity Calculator for Central Government Employees. Use our Gratuity Calculator to calculate your entitlement and plan your financial future.

What is Gratuity ?

Gratuity is a financial benefit provided to employees as a token of appreciation for their continuous service to an organization. It acts as a retirement or resignation benefit under the Payment of Gratuity Act, 1972, applicable to eligible employees in India. The Gratuity Calculator will calculate your entitlement subject to your service fullfilments.

Who is Eligible for Gratuity?

Employees who have completed at least 5 years of continuous service in an organization. Exceptions: In cases of death or disability, the 5-year rule does not apply.

How is Gratuity Calculated?

Gratuity is calculated using this formula for central government employees:Gratuity=(Basic Pay + DA)×Years of Service×12\text{Gratuity} = \text{(Basic Pay + DA)} \times \text{Years of Service} \times \frac{1}{2}Gratuity=(Basic Pay + DA)×Years of Service×21​

Key Points of the Gratuity:

Basic Pay: The fixed salary excluding allowances. DA (Dearness Allowance): Cost of living adjustment to offset inflation. Maximum Gratuity Limit: ₹20 Lakhs (as per government rules).

Benefits of Gratuity, Financial Security:

Helps employees meet post-retirement or resignation expenses. Tax-Free Returns: Gratuity is exempt from tax up to ₹20 Lakhs under Section 10(10) of the Income Tax Act. Recognition of Loyalty: Encourages long-term association with an organization.

Why Use a Gratuity Calculator?

Accuracy: Quickly and accurately compute gratuity amounts.

Transparency: Understand your benefits under government policies.

Financial Planning: Helps employees plan future investments and expenses effectively.

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