A gratuity calculator helps Indian employees estimate the lump-sum payment they are entitled to under the Payment of Gratuity Act, 1972. Gratuity is a statutory benefit paid by employers to employees who have completed at least five years of continuous service. The amount depends on your last drawn salary (basic + DA), years of service, and whether your employer is covered under the Act. Use this tool to calculate your gratuity, understand tax exemptions, and see how your benefit grows with each additional year of service.
Employment Details
Basic pay + Dearness Allowance (monthly)
Determines formula divisor (26 or 30)
6+ months rounds up to next year
How to Use the India Gratuity Calculator
Gratuity is one of the most important retirement benefits for Indian employees. Under the Payment of Gratuity Act, 1972, employers must pay a lump sum to any employee who completes five or more years of continuous service. This India gratuity calculator makes it simple to determine exactly how much you are entitled to, whether you are covered under the Act, and how much of it is tax-free.
Step 1: Enter Your Monthly Basic Salary + DA
Input your last drawn monthly salary, which includes your basic pay plus dearness allowance (DA). Do not include HRA, special allowances, or bonuses. This is the salary figure that the gratuity formula uses as its base. If you are unsure of your basic + DA split, check your most recent pay slip or CTC breakdown.
Step 2: Select Your Employment Type
Choose the category that matches your employer. Government employees and those working in organizations with 10 or more employees are "covered under the Act" and use a divisor of 26 (working days per month). Employees in small private firms with fewer than 10 employees use a divisor of 30 (calendar days). Government employees enjoy fully tax-exempt gratuity.
Step 3: Enter Your Years and Months of Service
Enter your total tenure in completed years and additional months. The calculator applies the rounding rule: if you have 6 or more months beyond your completed years, the total rounds up. For example, 7 years 7 months becomes 8 years for gratuity purposes. Note that 4 years and 240 days of service qualifies as 5 years under the Act.
Step 4: Review Your Gratuity Results
The calculator displays your total gratuity amount, effective years of service, tax-exempt portion, and taxable portion. You also get a step-by-step formula breakdown showing exactly how the figure was derived. The year-by-year growth table reveals how your gratuity increases with each additional year of service, helping you plan whether staying longer at your current employer is financially worthwhile.
Understanding the New Labour Code Provisions
The comparison table shows differences between the current Payment of Gratuity Act and the proposed new labour codes. Key changes include a potential increase in the maximum cap from Rs 20 lakh to Rs 25 lakh and expanded definitions of wages. Since these codes have been passed but not yet enforced, the calculator shows both scenarios so you can plan for either outcome. All calculations run entirely in your browser, keeping your salary data completely private.
FAQ
Is this India gratuity calculator free?
Yes, this gratuity calculator is completely free with no signup, no hidden fees, and no usage limits. All calculations run locally in your browser, so you can estimate your gratuity as many times as needed.
Is my salary data safe and private?
Absolutely. All calculations happen entirely in your browser using client-side JavaScript. No salary, employment, or personal data is ever sent to any server. Your information stays completely private on your device.
How is gratuity calculated under the Payment of Gratuity Act?
For employees covered under the Act (organizations with 10 or more employees), gratuity is calculated as: (Last drawn salary x 15 x years of service) / 26. Last drawn salary includes basic pay plus dearness allowance. The divisor of 26 represents working days in a month.
What is the minimum service required for gratuity eligibility?
You need at least 5 years of continuous service to be eligible for gratuity. However, if you have completed 4 years and 240 days (or 190 days for seasonal workers), it counts as 5 years under the Act. Gratuity is also payable on death or disability regardless of tenure.
What is the maximum gratuity limit in India?
Under the current Payment of Gratuity Act, the maximum gratuity payable is Rs 20,00,000 (20 lakh). The proposed new labour codes may increase this cap to Rs 25,00,000 (25 lakh), but the exact implementation date has not been finalized.
How is gratuity taxed in India?
For government employees, gratuity received is fully exempt from income tax. For private sector employees covered under the Act, gratuity is exempt up to Rs 20,00,000. Any amount received above this limit is taxable as income from salary.
What is the difference between the /26 and /30 gratuity formula?
The /26 formula applies to employees covered under the Payment of Gratuity Act (organizations with 10+ employees), where 26 represents working days per month. The /30 formula applies to employees not covered under the Act (typically private sector with fewer than 10 employees), using 30 calendar days per month.
How are months of service rounded for gratuity calculation?
If you have worked 6 months or more in your last year of service, it rounds up to the next full year. For example, 7 years and 7 months of service counts as 8 years. If you have worked less than 6 months in the last year, it rounds down to the completed years.