Gratuity Calculator

Calculate the gratuity you will get when you leave a job, based on your last drawn basic pay plus DA and years of service.

Gratuity amount
₹0
0Years counted
₹0Tax-free (private sector)
₹0Taxable part

Gratuity formula

Covered employer: Gratuity = 15 × (Basic + DA) × Years ÷ 26
Not covered: Gratuity = 15 × (Basic + DA) × Completed years ÷ 30

The "15" stands for 15 days of wages for every year of service. The divisor 26 is the number of working days in a month under the Payment of Gratuity Act.

Example

Last basic + DA of ₹50,000 and 7 years 8 months of service with a covered employer: the 8 months round up, so 8 years are counted. Gratuity = 15 × 50,000 × 8 ÷ 26 = ₹2,30,769.

Gratuity and your CTC

Many companies show gratuity in CTC as 4.81% of basic (15 ÷ 26 ÷ 12). It is paid only when you leave after becoming eligible. See how it affects your monthly pay with the in-hand salary calculator.

Tax on gratuity

Private sector employees get up to ₹20 lakh tax-free over their working life. Any amount above that is added to salary income and taxed at slab rates. Government employees' gratuity is fully tax-free.

Frequently asked questions

What is the gratuity formula?
For employers covered by the Payment of Gratuity Act: Gratuity = 15 × last drawn (basic + DA) × years of service ÷ 26. For employers not covered, the divisor is 30 and only completed years count.
Am I eligible for gratuity before 5 years?
Permanent employees normally need 5 years of continuous service. Courts and many employers count 4 years and 240 days as 5 years. Under the new labour codes, fixed-term employees can become eligible after 1 year. Gratuity is also paid regardless of service on death or disability.
How much gratuity is tax-free?
For private sector employees, gratuity up to ₹20 lakh in a lifetime is tax-free. For government employees the entire gratuity is tax-free.
Is 4 years 7 months counted as 5 years?
For covered employers, service of more than 6 months in the last year is rounded up. So 4 years 7 months is counted as 5 years for the amount, though eligibility rules on the 5-year minimum still apply.

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Last updated: 2026-11-02