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Gratuity calculator

Gratuity is a thank-you payment for long service, set by law. The formula is simple; the rounding rule is where people leave money on the table.

₹
₹60 thousand
 yrs
 mo
Employer covered by the Gratuity Act?
Employment type
Needs 5 years of continuous service
Basic is less than half your pay?
₹
Under the labour codes, wages for gratuity are at least half your total pay. Leave at 0 to use basic + DA as it is.
Your gratuity
₹2,42,308
15/26 × ₹60,000 × 7 years
Tax-free
₹2,42,308
Taxable
₹0
Years counted
7

How it grows with service

0₹3.75 L₹7.5 L₹11.25 L₹15 L5 yrs1015202530
Staying 3 more months rounds your service up to 8 years — that adds ₹34,615.
Gratuity up to ₹20,00,000 is tax-free for private-sector employees over a lifetime; government employees’ gratuity is fully exempt.
How it’s calculated

The maths, in plain words

The formula

For employers covered by the Gratuity Act: 15 ÷ 26 × your last monthly basic + DA × years of service.

Rounding

More than six months in your final year counts as a full year. Leaving at 7 years 6 months counts 7; at 7 years 7 months it counts 8.

Not covered?

Employers outside the Act often use 15 ÷ 30 × salary × completed years.

Questions

People also ask

Your inputs stay on this device. Use Copy link to save or share a calculation.

How is gratuity calculated?
Last drawn basic + DA × 15/26 × years of service. On a ₹60,000 basic after 7 years, that’s about ₹2.42 lakh.
Do I need five years?
Permanent employees need five years of continuous service (except on death or disability). Under the labour codes, fixed-term employees qualify after one year.
Is gratuity taxable?
For private-sector employees, up to ₹20 lakh over a lifetime is tax-free. Government employees’ gratuity is fully exempt.
Understand it

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