Gratuity Calculator
Work out the gratuity you'll get when you leave or retire — the official formula, rounding of extra months, and how much is tax-free.
- Official formula: 15/26 × Basic + DA × years
- Over 6 months counts as a full year
- Tax-free up to ₹20 lakh (private sector)
- Covers fixed-term employees (1 year)
Under the Payment of Gratuity Act, service of more than 6 months in the last year counts as a full year. Gratuity up to ₹20 lakh is tax-free for private-sector employees; government employees' gratuity is fully tax-free. Under the new Labour Codes, fixed-term employees qualify after 1 year.
Frequently asked questions
How is gratuity calculated?
For employers covered by the Act: Gratuity = 15 × last monthly (Basic + DA) × years of service ÷ 26. The 26 is the working days in a month; 15 days' wages are paid for each year.
Who is eligible?
Employees with at least 5 years of continuous service (no minimum on death or disability). Under the new Labour Codes, fixed-term employees are eligible after 1 year.
How much gratuity is tax-free?
Up to ₹20 lakh in total for private-sector employees. Government employees' gratuity is fully exempt.
My employer isn't covered by the Act — what then?
The formula is 15 × average monthly salary of the last 10 months × completed years ÷ 30, and only completed years count.
Know your gratuity before you resign
Gratuity is a lump sum your employer pays as thanks for long service. Enter your last Basic + DA and years of service to see the amount and the tax on it.