Gratuity Calculator
Calculate the gratuity you're entitled to on resignation or retirement under India's Payment of Gratuity Act, 1972, plus how much of it is tax-free.
Tax-free limit: ₹20 lakh | Minimum 5 years service required
Disclaimer. This calculator is provided for educational and informational purposes only. Results are estimations and do not constitute professional financial, investment, tax, or legal advice. Consult a qualified advisor before making financial decisions. Read full disclaimer →
About Gratuity Calculator
Gratuity is a statutory retirement benefit payable under the Payment of Gratuity Act, 1972 to employees who have completed at least 5 years of continuous service. Formula for employees covered under the Act: Gratuity = (Last drawn Basic + DA) x 15/26 x Number of completed years. The 15/26 factor represents 15 days wages for each completed year (based on 26 working days per month).
Gratuity exemption limits: minimum of (a) actual gratuity received, (b) Rs 20 lakh (tax exemption limit as of 2019), or (c) 15 x last salary x years of service / 26. Amount above Rs 20 lakh is taxable. For employees not covered under the Act, the formula uses 30 days instead of 15. Fractional year rounding: service of 6 months or more in the last year counts as a full year. Gratuity is payable within 30 days of leaving; delay attracts simple interest at the prescribed rate. Employer must obtain a gratuity insurance policy or create a gratuity trust for funding the liability.