Gratuity Calculator

Gratuity is a lump sum your employer owes you for staying 5+ years, calculated as 15 days' wages for every year served. It only ever pays out once, when you leave, retire, or (for a fixed-term contract) finish the contract — never as part of your regular monthly salary.

Generally, you need 5+ years of continuous service with the same employer. Since November 2025, fixed-term contract employees qualify after just 1 year instead, and the 5-year rule is waived entirely if employment ends due to death or disablement.

Companies with fewer than 10 employees aren't covered under the Payment of Gratuity Act. If they still choose to pay gratuity voluntarily, they typically use a 30-day divisor instead of the Act's 26-day one, which works out to a smaller amount for the same salary and tenure.

If you're covered under the Act, any 6 or more months in your final year of service round up to a full additional year: 7 years 8 months becomes 8 years for the formula. Under 6 months rounds down instead. Non-covered employees don't get this rounding at all; their formula uses the exact fractional years.

Only up to ₹20 lakh: the least of the actual amount received, ₹20 lakh, or the formula amount is exempt under Section 10(10). This ₹20 lakh limit is a lifetime cap across every employer you've ever received gratuity from, not a fresh limit each time. Government employees get an unlimited exemption.

Only if you're not covered under the Act: Section 4(3) legally caps what's payable under the Act itself at ₹20 lakh for covered employees. A generous employer can still pay more as an ex-gratia amount, but that excess isn't "gratuity" under the Act and is fully taxable.

No. It's a separate lump sum your employer is legally obligated to pay on exit, funded either from a dedicated gratuity trust or the company's own funds. See the CTC to In Hand Calculator for how it's typically provisioned into your CTC without ever touching your monthly payslip.

In India's employment law, gratuity meaning is specific: a one-time statutory payout for 5+ years of service, distinct from the everyday sense of a service "tip." It's governed by the Payment of Gratuity Act, now folded into the Code on Social Security, not a voluntary gesture.

Calculating gratuity multiplies your last drawn Basic + DA by 15, by your years of service, then divides by 26 (or 30 if your employer isn't covered under the Act) — the same formula for gratuity this calculator runs, and full gratuity computation, so you don't need to do the gratuity calculation by hand yourself.

Gratuity eligibility generally requires 5+ continuous years of service with the same employer. Since November 2025, fixed-term contract employees qualify after just 1 year instead, and the 5-year rule is waived entirely for death or disablement.

Yes to both — this is a free online gratuity calculator built for private-sector employees (government employees get an unlimited tax exemption instead of the ₹20 lakh cap modeled here). Calculate gratuity online in seconds, or use it simply to calculate gratuity amount for one specific payout — no sign-up needed.

Yes — this gratuity calculator in India uses the Payment of Gratuity Act's formula, now absorbed into the new labour laws, specifically the Code on Social Security, 2020 (effective November 2025). One nuance the new code adds: wages used for gratuity, PF, and pension must be at least 50% of total remuneration, so if your Basic + DA is unusually low relative to your CTC, the real statutory calculation may use a higher base than what you enter here.

Calculating gratuity for 7 years at a ₹50,000 last-drawn Basic + DA: ₹50,000 × 15 × 7 ÷ 26 = ₹2,01,923. That's the core of calculating gratuity by hand — this calculator runs the same formula instantly with your own numbers, plus the rounding and ₹20 lakh ceiling rules applied automatically.