💡 Eligibility: Minimum 5 years of continuous service. Tax-free up to ₹20 lakh.
Gratuity Amount
₹0
Eligible
Tax Position
Tax-free limit
₹20,00,000
Your gratuity
₹0
Taxable amount
₹0
Status
Tax-Free
Formula: (Last Salary × 15 × Years) ÷ 26 (covered) or ÷ 30 (not covered). Capped at ₹20 lakh.
A gratuity calculator helps you find out exactly how much gratuity money you’re entitled to after years of service — no manual math needed. Gratuity is a lump-sum reward your employer pays when you leave after completing at least 5 years. Use this gratuity calculator to get your number in seconds.
Quick Answer: A gratuity calculator uses the formula: (Last Drawn Salary × 15 × Years of Service) ÷ 26. For a salary of ₹50,000/month and 10 years of service, your gratuity payout works out to ₹2,88,461. Results are instant.
Table of Contents â–¼
What is a Gratuity Calculator?
What is the Gratuity Formula and How Does It Work?
How to Use This Gratuity Calculator
Gratuity Calculator — Results at Different Salary Amounts
What Factors Affect Your Gratuity Amount?
Tips to Maximise Your Gratuity Payout
FAQs About Gratuity Calculator
What is a Gratuity Calculator?
A gratuity calculator is an online tool that computes the gratuity amount payable to an employee based on their last drawn salary and total years of service, as per the Payment of Gratuity Act, 1972.
Think of gratuity as a “thank you” from your employer. You worked hard for years — gratuity is your reward when you retire, resign, or are let go. Under the Payment of Gratuity Act, 1972, every employer with 10 or more employees must pay gratuity. Companies like SBI, HDFC, ICICI Bank, and most large private firms are covered.
As per government data, over 5 crore organised sector employees in India are eligible for gratuity benefits. A good gratuity calculator saves you from manual errors and gives you a clear number fast.
What is the Gratuity Formula and How Does It Work?
The gratuity formula is simple once you know it. Two different formulas apply — one for employees covered under the Act, and one for those not covered.
For Employees Covered Under the Gratuity Act
Gratuity = (Last Drawn Salary × 15 × Years of Service) ÷ 26
Here, “Last Drawn Salary” means Basic Pay + Dearness Allowance (DA). The number 26 represents working days in a month. The 15 stands for 15 days’ salary per year of service.
For Employees NOT Covered Under the Act
Gratuity = (Last Drawn Salary × 15 × Years of Service) ÷ 30
This formula uses 30 instead of 26. It gives a slightly lower amount. Many smaller companies or domestic workers fall in this category.
One important detail — if your last year of service has more than 6 months, it rounds up to a full year. So 9 years and 8 months counts as 10 years. Our gratuity calculator handles this rounding automatically.
Also note: as per Income Tax rules under Section 10(10), gratuity up to ₹20 lakh is fully tax-exempt for government and private sector employees covered under the Act. This limit was revised and remains applicable in FY2025-26. Anything above ₹20 lakh becomes taxable income.
How to Use This Gratuity Calculator
Using the gratuity calculator takes less than a minute. Here’s exactly what to do:
Step 1: Enter your last drawn Basic Salary + DA This is your basic monthly pay plus dearness allowance — not your total CTC or take-home salary. Check your salary slip for the exact figure.
Step 2: Enter your total years of service Count from your date of joining to your last working day. If you’ve worked 7 years and 8 months, the gratuity calculator rounds it up to 8 years.
Step 3: Select your employment type Choose “Covered under Gratuity Act” (most private and government employees) or “Not covered” (smaller firms, some contractual roles).
Step 4: Click Calculate The gratuity calculator instantly shows your gratuity amount, tax-exempt portion, and taxable amount if any.
Step 5: Plan what to do with the money Consider reinvesting it. You can explore a SIP calculator to see how your gratuity grows if invested in mutual funds.
Gratuity Calculator — Results at Different Salary Amounts
Wondering what your gratuity could look like? This table covers common salary levels and service durations — all calculated using the standard gratuity calculator formula.
Basic + DA (Monthly)
Years of Service
Gratuity Amount
Tax Status
₹20,000
5 years
₹57,692
Fully exempt
₹30,000
8 years
₹1,38,461
Fully exempt
₹50,000
10 years
₹2,88,461
Fully exempt
₹80,000
15 years
₹6,92,307
Fully exempt
₹1,00,000
20 years
₹11,53,846
Fully exempt
₹1,50,000
25 years
₹21,63,461
₹1,63,461 taxable
Tax calculations are indicative. Consult a CA for your specific tax situation.
What Factors Affect Your Gratuity Amount?
Three core factors drive the gratuity calculator result. Understanding them helps you estimate better — and plan smarter.
1. Basic Salary + DA
This is the biggest lever. A higher Basic + DA means a higher gratuity payout. Many employers keep the Basic low to reduce gratuity liability — so always check your salary structure carefully.
2. Years of Service
You need a minimum of 5 continuous years to be eligible. Every extra year adds to your payout. Switching jobs frequently can mean losing gratuity if you leave before 5 years — a real cost many people overlook.
3. Type of Employment
Employees covered under the Payment of Gratuity Act get calculated on 26 working days. Those not covered use 30 days. The difference can be thousands of rupees — which is why the gratuity calculator asks you to select your category.
Death or disability is a special case. If an employee dies or becomes disabled before 5 years, gratuity is still payable. The PPF calculator is worth checking too if you’re thinking about long-term retirement savings alongside gratuity.
Tips to Maximise Your Gratuity Payout
Small decisions now can mean lakhs more at retirement. Here’s what actually works.
Negotiate a higher Basic Salary at joining. Since the gratuity calculator uses Basic + DA, a higher basic at the start compounds across all your years of service. Don’t let employers lump everything into allowances.
Complete your 6-month threshold. If you’re at 4 years and 7 months, stick it out to 5 years. No 5 years = no gratuity, full stop. And if you’re at 9 years 6 months, staying till 10 years adds a full extra year to your gratuity calculation.
Check if your company is covered. Use the gratuity calculator’s “covered vs not covered” option correctly — it changes your result. When in doubt, ask your HR team for a written confirmation.
Reinvest your gratuity smartly. A lump sum of ₹3–5 lakh invested via SIP in index funds can grow significantly over 10–15 years. Check the lumpsum calculator to see how your gratuity could grow over time.
Know your tax exemption limit. Under Section 10(10) of the Income Tax Act, up to ₹20 lakh of gratuity is tax-free. Plan withdrawals accordingly, especially if you’re close to this limit across multiple employers over your career.
Key Takeaways:
The gratuity calculator formula is: (Basic+DA × 15 × Years) ÷ 26 for Act-covered employees.
Minimum 5 years of service is mandatory to receive gratuity — even 4 years 11 months doesn’t qualify (except death/disability).
Gratuity up to ₹20 lakh is fully tax-exempt under Section 10(10) of the Income Tax Act, applicable in FY2025-26.
For a ₹50,000 Basic+DA salary and 10 years of service, gratuity = ₹2,88,461.
The maximum gratuity payable under the Act is currently capped at ₹20 lakh — though employers can voluntarily pay more.
FAQs About Gratuity Calculator
Q: How does a gratuity calculator work?
A: A gratuity calculator applies the formula (Last Drawn Basic+DA × 15 × Years of Service) ÷ 26 for employees covered under the Payment of Gratuity Act, 1972. You enter your salary and service years, and the gratuity calculator instantly shows your eligible payout and tax-exempt portion under Section 10(10).
Q: Is gratuity calculator result tax-free?
A: Yes, the gratuity calculator result is tax-free up to ₹20 lakh under Section 10(10) of the Income Tax Act. This limit applies to private sector employees covered under the Gratuity Act. Any amount above ₹20 lakh is added to your taxable income and taxed as per your income slab.
Q: Can I use the gratuity calculator if I have less than 5 years of service?
A: You can use the gratuity calculator to estimate future amounts, but you won’t be legally entitled to receive gratuity with less than 5 years of continuous service. The only exceptions are death or permanent disability, where gratuity is paid regardless of service duration under the Payment of Gratuity Act, 1972.
Q: Which salary is used in the gratuity calculator — CTC or basic?
A: The gratuity calculator uses only Basic Salary plus Dearness Allowance (DA) — not your total CTC or in-hand salary. HRA, bonuses, or special allowances are not included. Check your latest salary slip for the exact Basic + DA figure before using the gratuity calculator for accurate results.
Q: What is the maximum amount the gratuity calculator can show?
A: The gratuity calculator can show any amount based on your inputs, but the statutory maximum under the Payment of Gratuity Act is ₹20 lakh. Employers may voluntarily pay more. The ₹20 lakh limit also matches the tax-exemption ceiling under Section 10(10) of the Income Tax Act for private employees.
Bookmark this gratuity calculator page and share it with colleagues who are planning to switch jobs or retire soon — knowing your gratuity number in advance helps you negotiate better and plan your finances with confidence.
