Retirement

Gratuity Calculator

Gratuity calculation for employees

About the Gratuity calculator

Free Gratuity Calculator for employee gratuity amount based on salary & years of service. Calculate as per Payment of Gratuity Act 1972.

Statutory rates and limits on this page are current for FY 2026-27 (AY 2027-28) and are unchanged from FY 2025-26, so the same figures apply whether you are filing last year’s return or planning this year. Last verified 23 August 2026.

How the maths works

Gratuity Formula

Gratuity = (Last Salary × 15 × Years of Service) / 26

15

Number of days for each year of service

26

Number of working days in a month

Last Salary

Basic salary + DA of last month

Years of Service

Completed years of service

A worked example

Gratuity Calculation Example

Gratuity Amount: ₹9,23,077

How to use it

1. Enter last drawn basic salary
2. Input years of completed service
3. Calculator applies the standard formula
4. Get gratuity amount and tax details

What it accounts for

• Calculate gratuity amount accurately
• Understand eligibility criteria
• Factor in salary components
• Consider service period
• Know tax implications

Why it is worth working out

• Retirement financial security
• Tax exemption up to specified limits
• Mandatory employer contribution
• Additional retirement corpus

Questions people ask

When do I become eligible for gratuity?

After five years of continuous service with the same employer. A year of over six months counts as a full year, so four years and seven months can qualify in many readings — but four years and five months does not. The five-year condition is waived if service ends through death or disablement.

How is gratuity calculated?

Last drawn basic plus dearness allowance, divided by 26, multiplied by 15, multiplied by completed years of service. The 26 represents working days in a month and the 15 represents fifteen days' wages for each year served.

Is gratuity taxable?

For employees covered by the Payment of Gratuity Act, it is exempt up to ₹20 lakh across your entire career, not per employer. Anything above that cap is taxed at your slab rate. Government employees receive it fully exempt.

Do I lose gratuity if I resign?

No. Gratuity is payable on resignation, retirement, or termination, provided the five-year condition is met. It can only be forfeited for specific misconduct causing damage or involving moral turpitude, and even then only to the extent of the loss.

Read more on this

• Gratuity — the formula, the 4-year-8-month rule, and the tax cap — A benefit most employees only think about on their last day, when the eligibility rule has already been decided by their resignation date.

This calculator is for information and education. It is not financial advice — see the disclaimer.