What is Gratuity Calculator?
Calculate your gratuity amount as per the Payment of Gratuity Act 1972 based on your last salary and years of service Simply enter your values, and the calculator instantly computes accurate results using standard financial formulas. All calculations are performed entirely in your browser — nothing is stored or transmitted.
Formula Used
Last Drawn Salary = Basic + DA | 15 = days of gratuity per year of service | 26 = working days in a month | Eligible after minimum 5 years of continuous service
How to Use This Calculator
- Enter your last drawn basic salary + DA per month
- Enter total years of continuous service with the employer
- Click Calculate to see your gratuity amount
- Note: service above 6 months in the last year is rounded up to a full year
- Tax exemption applies up to ₹20 lakh for government employees
Worked Example
Last Salary (Basic+DA): ₹60,000 | Service: 12 years 8 months (rounded to 13) → Gratuity = (60,000 × 15 × 13) / 26 = ₹4,50,000
Why Use This Tool?
- Know your exact gratuity before leaving or retiring
- Understand tax exemption limits on gratuity
- Plan notice period and resignation timing for full year benefit
- Verify employer's gratuity calculation is correct
Frequently Asked Questions
What is gratuity and who is eligible?
Gratuity is a lump sum payment by an employer to an employee as a token of appreciation for services rendered. Under the Payment of Gratuity Act 1972, employees who have completed 5 years of continuous service are eligible on resignation, retirement, or death/disability.
What is the tax exemption on gratuity?
For government employees: entire gratuity is tax-free. For private employees covered under the Gratuity Act: least of (a) actual gratuity, (b) ₹20 lakh, or (c) formula-calculated amount is tax-exempt. Amount above ₹20 lakh is taxable.
Is gratuity payable if I resign before 5 years?
Generally no. However, in case of death or disability, gratuity is paid regardless of service period. Some employers voluntarily pay gratuity for shorter tenures, but it is not legally mandated under the Act.
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