Gratuity Calculator – Estimate Your Gratuity in India
Calculate your gratuity amount based on your years of service and last drawn salary. Gratuity is a statutory benefit paid by employers to employees in India under the Payment of Gratuity Act, 1972.
Calculate Your Gratuity
Frequently Asked Questions
How is gratuity calculated in India?
Gratuity in India is calculated using the formula: Gratuity = (15 × Last Drawn Salary × Years of Service) / 26, where Last Drawn Salary = Basic Salary + Dearness Allowance. The calculation is based on the Payment of Gratuity Act, 1972. For example, if your last drawn salary is ₹50,000 and you have 10 years of service, your gratuity = (15 × 50,000 × 10) / 26 = ₹2,88,462.
Minimum years required for gratuity?
Under the Payment of Gratuity Act, 1972, an employee must have completed at least 5 years of continuous service with the same employer to be eligible for gratuity. The 5 years must be continuous, and any break in service may reset the eligibility period. However, in case of death or disablement, gratuity is payable even if the service period is less than 5 years.
Is gratuity taxable?
Gratuity is partially tax-free in India. For employees covered under the Payment of Gratuity Act, gratuity up to ₹20 lakhs is tax-free. For employees not covered under the Act, the tax exemption limit is lower (calculated as the least of: ₹20 lakhs, actual gratuity received, or 15 days' salary for each completed year of service). Any amount above the exemption limit is taxable as per your income tax slab.