Gratuity Calculator – Estimate Your Gratuity Payout on Retirement or Resignation
This Gratuity Calculator estimates the gratuity amount payable to you on retirement, resignation, or completion of a qualifying period of service. Enter your last drawn monthly salary and total years of continuous service to instantly calculate your gratuity payout. Use it to plan your exit finances or understand what you are entitled to before leaving an organisation.
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Gratuity Calculator
What is a Gratuity Calculator?
A Gratuity Calculator is an online tool that estimates the gratuity amount payable to an employee upon retirement, resignation, or completion of a qualifying period of service. Enter your last drawn monthly salary and total years of continuous service to instantly calculate your gratuity payout, helping you plan your finances before leaving an organisation.
How to Use Gratuity Calculator – 3 Step Flow
Streamline your finances with an easy, automated process — calculate, plan, and achieve your financial goals.
Enter your last drawn salary
Input your last drawn monthly basic salary plus Dearness Allowance (DA). The Payment of Gratuity Act uses basic + DA for the gratuity calculation, not the gross salary or total CTC. If your employer does not provide a separate DA component, use only the basic salary figure for the calculation.
Enter your years of service
Input your total years of continuous service with the employer. Gratuity requires a minimum of 5 years of continuous service to become payable on resignation or retirement. In the case of death or permanent disability, gratuity is payable regardless of the number of years completed.
Review your estimated payout
The calculator shows the gratuity amount payable based on the applicable formula. The result is an estimate, the actual amount may differ slightly based on how the employer rounds the completed service period (months exceeding 6 are typically rounded up to a full year).
How is Gratuity Calculated?
Gratuity in India is governed by the Payment of Gratuity Act, 1972, which applies to establishments with 10 or more employees. The formula differs based on whether the employee is covered under the Act or not.\n\nFor employees covered under the Payment of Gratuity Act:\nGratuity = (Last drawn basic + DA) × 15 × Years of service ÷ 26\nWhere:\n15 = Number of days' wages per year of service\n26 = Number of working days in a month\n\nFor employees NOT covered under the Act:\nGratuity = (Last drawn basic + DA) × 15 × Years of service ÷ 30\nWhere:\n30 = Calendar days used in place of working days\n\nExample (covered under the Act):\nLast drawn salary (Basic + DA): ₹60,000/month | Years of service: 8 years\nGratuity = (₹60,000 × 15 × 8) ÷ 26 = ₹72,00,000 ÷ 26 ≈ ₹2,76,923\n\nExample (not covered under the Act):\nLast drawn salary: ₹60,000/month | Years of service: 8 years\nGratuity = (₹60,000 × 15 × 8) ÷ 30 = ₹72,00,000 ÷ 30 = ₹2,40,000\n\nThe ₹20 lakh tax-exempt ceiling is for private sector employees. Government employees receive full tax exemption on gratuity without limit. Gratuity above the exempt ceiling is taxable as salary income in the year of receipt.
| Rule | Detail |
|---|---|
| Minimum service | 5 years continuous service (except death or disability) |
| Maximum gratuity | ₹20 lakh (statutory ceiling as of current rules) |
| Service rounding | Months >6 in the last year are rounded up to a full year |
| Payment timeline | Within 30 days of the due date; employer liable to pay interest beyond this |
| Tax exemption | Up to ₹20 lakh is tax-free for private sector employees under Section 10(10) |
| Government employees | Fully exempt from tax with no ceiling limit |
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