Calculator

Gratuity Calculator – Formula, Eligibility, Tax Limit

Estimate the gratuity you can get when you leave a job, using the Payment of Gratuity Act formula.

Last drawn basic + DA (₹ per month)

Basic pay plus dearness allowance only. HRA, bonus and other allowances are not counted.

Years of service

Extra months

Employment type

Is your employer covered by the Act?

Most organisations with 10 or more employees are covered. Ask HR if unsure.

Gratuity (estimate)

Years counted

Tax-free part

Enter your monthly basic + DA and your length of service to see the estimate.

Estimate only. Formula: 15 ÷ 26 (or 30) × last wage × years of service. Gratuity is tax-free up to ₹20,00,000 for private employees. Your employer's actual calculation, caps and tax treatment may differ; confirm with HR or a tax professional.

About the Gratuity Calculator

The Gratuity Calculator estimates the gratuity you could receive when you leave a job, using the Payment of Gratuity Act formula of last drawn basic plus dearness allowance × 15 ÷ 26 × completed years of service. It shows whether you meet the service condition and how much is tax-free. It is an estimate; your employer's calculation is what counts.

Gratuity Calculator quick facts

Formula:

Last drawn basic plus DA × 15 ÷ 26 × completed years of service

Wages:

Basic pay plus dearness allowance

Service condition:

Generally five years of continuous service, with exceptions

Tax-free limit used:

₹20 lakh

Note:

An estimate; your employer's calculation is what counts

How to use the Gratuity Calculator

Enter your last drawn monthly basic plus DA, and your years and extra months of service.
Choose permanent, fixed-term or death or disablement, and whether your employer is covered by the Act.
Read the gratuity, the years counted, eligibility and the tax-free part.

How gratuity is worked out

Gratuity is 15 days of wages for each completed year of service. A month is taken as 26 working days for employers covered by the Act, so each year earns 15 ÷ 26 of a month's basic plus DA.

Worked example

With a basic plus DA of ₹40,000 and 3 completed years of service, gratuity is 40,000 × 15 ÷ 26 × 3 = about ₹69,231. With 6 years 7 months of service the years counted are 7.

Limits and tax

The Payment of Gratuity Act sets a ceiling on the amount, and the income tax exemption for private employees is ₹20 lakh as reported. Your own employer may pay more under its policy, but the extra can be taxable.

Common mistakes

Using gross salary instead of basic plus DA, forgetting that more than six months rounds up, and assuming the five-year rule has no exceptions.

Frequently asked questions about the Gratuity Calculator

What is the gratuity formula?

Gratuity = last drawn monthly wage (basic plus DA) × 15 ÷ 26 × completed years of service. For employers not covered by the Act the divisor is commonly 30 instead of 26.

Who is eligible for gratuity?

Permanent employees normally need five years of continuous service, which is waived on death or disablement. Reports say the new labour codes allow fixed-term employees to qualify after one year; check the current rules for your case.

How are months of service counted?

Service of more than six months in the last year is rounded up to a full year, so 6 years 7 months counts as 7 years and 6 years 6 months counts as 6.

Is gratuity taxable?

For private-sector employees covered by the Act, gratuity is tax-free up to ₹20 lakh across a career, as reported at the time of writing; any amount above that is taxable. Government employees have different rules.

What counts as wages for gratuity?

For the gratuity formula, wages mean your last drawn basic pay plus dearness allowance. House rent allowance, bonus, overtime and most other allowances are not included. Check the basic and dearness allowance on your salary slip and enter just that amount.

How soon must gratuity be paid?

The Act requires payment within 30 days of it becoming due, as reported. If it is late, ask HR and consider the Controlling Authority under the Act.

Free, no sign-up. Reviewed 15 October 2026 by the Gopafy team. See all free tools.