Gratuity Calculator

Calculate your gratuity under the Act, with the tax-exempt portion shown.

Enter your last drawn basic plus dearness allowance and your length of service. We will apply the correct formula for your employer type and show the tax-exempt and taxable portions.

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Employer covered by the Gratuity Act
Applies to any establishment with 10 or more employees

The formula the Act prescribes

For an employer covered by the Payment of Gratuity Act, gratuity is fifteen days of wages for every completed year of service, where a month is treated as twenty-six working days. That gives the familiar 15 ÷ 26 × last drawn salary × years of service.

The six-month rounding rule

Service beyond six months in your final year rounds up to a full year; service of six months or less is dropped. Seven years and seven months counts as eight years. Seven years and five months counts as seven. Those five months are worth a great deal, which is why resignation timing matters.

If your employer is not covered

Establishments with fewer than ten employees are outside the Act. Gratuity may still be paid, but the conventional formula uses 15 ÷ 30 rather than 15 ÷ 26, and only fully completed years count with no rounding up. The result is meaningfully lower.

Which components count as salary

Only basic salary and dearness allowance. HRA, conveyance, special allowance and bonus are excluded. Using your gross salary here will overstate your gratuity considerably.

The exemption is a lifetime limit

The ₹20 lakh exemption applies across your entire career, not per employer. If you received exempt gratuity at a previous job, that amount reduces the exemption available now.

Frequently asked questions

Do I qualify for gratuity with less than five years of service?
Generally no. The five-year requirement is waived only where service ends due to death or disablement. Some courts have held that 4 years and 240 days completes the fifth year — check your employer's policy.
Is gratuity taxable?
Government employees receive it fully exempt. For others, the exemption is the lowest of the actual gratuity, the amount under the Act formula, or ₹20 lakh — and that ceiling is a lifetime limit.
Does the notice period count towards service?
Yes, if you serve it. Notice period that is bought out rather than served is generally excluded from continuous service.
Which salary figure should I enter — current or at the time of leaving?
The last drawn figure, meaning your basic plus DA in your final month of service. Gratuity is always calculated on your final salary, not an average.