Gratuity Calculator India
Calculate your exact gratuity amount using the official formula under the Payment of Gratuity Act 1972. Find out what's tax-free and taxable.
Calculate Your Gratuity Amount
Gratuity is a lump-sum payment made by your employer as a token of gratitude for your service. You are eligible after completing 5 years of continuous service.
Gratuity Formula (Payment of Gratuity Act 1972)
Gratuity = (Basic + DA) × 15 / 26 × Number of Years of Service
The divisor is 26 because a month is considered to have 26 working days (excluding 4 Sundays). "15" represents 15 days of salary per year of service.
For Organisations Not Covered Under the Act
Gratuity = (Basic + DA) × 15 / 30 × Number of Years of Service
The divisor is 30 (calendar month) instead of 26 working days, resulting in a slightly lower gratuity amount.
Gratuity Eligibility Rules
- Minimum 5 years of continuous service with the same employer is mandatory
- Payable on: resignation, retirement, death, disablement due to accident or illness
- In case of death/disablement, the 5-year condition is waived
- Any organisation with 10 or more employees is covered under the Act
Gratuity Tax Rules
- Government employees: Entire gratuity is tax-exempt
- Private employees covered under Act: Exempt up to ₹20,00,000 (enhanced in 2018)
- Private employees not covered: Exempt up to least of — actual gratuity, ₹20L, or half-month salary × years
- Amount above ₹20L is fully taxable as income in the year of receipt
Important Notes
- If the last year of service has 6 or more months, it rounds up to the next full year
- Gratuity must be paid within 30 days of becoming due; delay attracts interest
- Employer cannot deduct gratuity for misconduct / wilful negligence causing damage
- Gratuity received is shown under "Salary" head in your ITR