Gratuity Calculator India
Calculate gratuity amount as per Payment of Gratuity Act 1972. Compute gratuity for private and government employees.
About this calculator
The Gratuity Calculator India works out the lump sum due to you at the end of your employment, for private sector and government employees. Enter your basic salary, any dearness allowance and your service in years and months. It shows the formula used, the service period counted and the tax-free amount.
It handles three situations: a private employee covered by the Gratuity Act, a government or PSU employee, and a private employee whose employer has fewer than ten staff and is not covered. Each uses a slightly different formula, so selecting the right one matters.
How to use it
- Enter your Last Drawn Basic Salary per month.
- Enter your Dearness Allowance, if any.
- Enter Years of Service and extra Months.
- Choose the Employee Type.
- Press Calculate Gratuity to see the amount, the formula and the tax treatment.
Formulas by employee type
For employees covered by the Payment of Gratuity Act and its successor provisions: Gratuity = Last drawn salary × 15 ÷ 26 × Years of service, where salary is basic plus dearness allowance. The 26 stands for working days in a month. For employees not covered, the formula uses 30 days: Salary × 15 ÷ 30 × Years. A part year of more than six months is rounded up to a full year. The tax-free limit is ₹20 lakh.
Worked example
Basic ₹50,000 a month, 10 years of service, covered employee
| Gratuity (50,000 × 15 ÷ 26 × 10) | ₹2,88,462 |
| Tax-free limit | ₹20,00,000 |
| Taxable portion | ₹0 |
If the same employee is not covered by the Act, the formula uses 30 days and the gratuity is ₹2,50,000. Always check which rule your employer follows.
Tips and common mistakes
- Gratuity is payable after five years of continuous service, with exceptions for death or disability. Fixed-term employees under the labour codes now qualify after one year.
- The labour codes brought in a wider definition of wages from 21 November 2025, which can raise the base salary used for gratuity.
- The tax-free limit is ₹20 lakh across all employers. Anything above that is taxable as salary.
- Gratuity is calculated on your last drawn salary, so a raise in the final year lifts the payout.
- Check whether your employer pays gratuity on basic plus DA only, or on the wider wages definition now in force.
Frequently asked questions
How do I calculate gratuity for 10 years of service?
For a covered employee with basic ₹50,000: 50,000 × 15 ÷ 26 × 10 = ₹2,88,462.
Is DA included in gratuity?
Yes, gratuity is calculated on basic plus dearness allowance.
How are extra months treated?
More than six months rounds up to the next year. Six months or fewer are dropped.
Is gratuity for government employees different?
It is governed by separate rules, with a formula of a quarter of monthly emoluments for each completed six-month period, and a ceiling set by the government.
Do the new labour codes change my gratuity?
They widen the wage base, because allowances above 50% of total pay are added back, and shorten the eligibility period for fixed-term employees.
Is gratuity paid if I resign?
Yes, if you have completed the minimum qualifying service. Resignation does not cancel it.