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Gratuity Calculator
Calculate your gratuity as per the Payment of Gratuity Act 1972. Enter your last drawn salary and years of service.
How gratuity is calculated
- Formula: (Last Basic + DA) × Years of Service × 15 ÷ 26
- Minimum 5 years of continuous service required (4 years 240 days also qualifies in some courts).
- If service includes 6+ months in the last year, it rounds up to the next year.
- Maximum gratuity exempt from tax: ₹20 lakh (from FY 2023-24).
Questions
What is the maximum gratuity payable?
Under the Gratuity Act there is no statutory maximum, but the tax exemption cap is ₹20 lakh. Amounts above ₹20L are taxable as salary income.
Does gratuity apply to contract employees?
If you complete 5 years of continuous service with the same employer (including through a contractor), you are eligible under the Act.
What if I resign before 5 years?
Gratuity is not payable on voluntary resignation before 5 years. It is payable on death, disability or termination by the employer at any tenure.
Is gratuity taxable?
For private sector employees, gratuity up to ₹20 lakh is fully exempt from income tax under Section 10(10). Amounts above ₹20L are taxed as salary.