Calculate the gratuity you are entitled to on resignation or retirement from an Indian employer. Uses the statutory 15/26 formula for companies covered under the Payment of Gratuity Act and shows the tax-exempt limit of Rs. 20 lakh.
Step 1. Enter your monthly Basic + DA salary (not total CTC — just Basic and Dearness Allowance).
Step 2. Enter years and extra months of service with your current employer.
Step 3. Select whether your employer is covered under the Payment of Gratuity Act.
Step 4. The calculator applies the 15/26 formula, checks the Rs. 20 lakh exemption limit, and shows taxable portion.
With the default inputs loaded in the form, the calculator produces a starting result you can use as a baseline. Change one field at a time to compare a new scenario.
Gratuity is a lump-sum payment by an employer to an employee as a token of gratitude for continuous service rendered. Under the Payment of Gratuity Act 1972, employees who have completed 5 or more years of continuous service are eligible.
The Act covers establishments with 10 or more employees. In practice, most private sector companies, government-owned corporations, and large businesses are covered. Smaller establishments below 10 employees may still pay gratuity voluntarily.
The divisor of 26 represents working days in a month (excluding Sundays). The 15 represents 15 days per year of service. The formula: Basic+DA × 15 × years ÷ 26 gives one year's entitlement as approximately 57.7% of one month's Basic+DA.
The tax-exempt limit is Rs. 20 lakh for government and private sector employees covered under the Act. Gratuity above this limit is taxable as salary income in the year of receipt.
You are not eligible for gratuity under the Act, except in cases of death or permanent disability where gratuity is paid regardless of service duration.
Up to Rs. 20 lakh is tax-exempt for government and private-sector employees covered under the Act. Gratuity above Rs. 20 lakh is taxable as salary in the year of receipt.
Gratuity is calculated on Basic + Dearness Allowance only, not on total CTC. HRA, special allowances, LTA, medical reimbursement, and bonus are not included.
No, except in cases of death or permanent disability. The 5-year continuous service requirement is mandatory under the Payment of Gratuity Act. Some employers voluntarily pay gratuity for shorter service periods — this would be ex-gratia, not statutory.
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Disclaimer: Results from this calculator are for informational and planning purposes only and do not constitute financial, legal, or professional advice. Always verify important calculations with a qualified professional.
