Gratuity Calculator
Calculate Your Gratuity Amount
Total Gratuity Amount
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📊 Your Gratuity Breakdown
Companies with 10+ employees are covered under Payment of Gratuity Act, 1972. This determines the calculation formula used.
Completed years of continuous service with the employer. Minimum 5 years required to be eligible for gratuity (except in case of death/disability).
Your basic salary in the last month before leaving. Only basic salary is considered, not gross salary.
DA component of your salary. This is added to basic salary for gratuity calculation as it forms part of retirement benefits.
Sum of Basic Salary and DA. This is the base amount used in gratuity formula calculation.
Covered: (Basic+DA) × 15 × Years ÷ 26. Not Covered: (Basic+DA) × 15 × Years ÷ 30. Different formulas for different employment types.
Final gratuity amount you’ll receive. This is a lump sum payment made by employer on separation/retirement.
Government-set maximum gratuity limit. Even if calculated amount is higher, you can’t receive more than ₹20 lakhs under the Act.
Portion of gratuity exempt from income tax. Up to ₹20 lakhs is tax-free for employees covered under Act, ₹10 lakhs for others.
Amount exceeding tax-free limit. This portion will be added to your income and taxed as per your tax slab.
Average gratuity earned per year of service. Helps you understand the value of long-term employment with one organization.
Gratuity amount as percentage of total salary earned over service period. Shows what portion of career earnings comes as gratuity.
💡 Gratuity – Complete Guide
What is Gratuity? Gratuity is a lump sum amount paid by employer to employee as a token of appreciation for services rendered. It’s a retirement benefit under Payment of Gratuity Act, 1972.
Eligibility: You must complete minimum 5 years of continuous service to receive gratuity. Exception: In case of death or disability, gratuity is paid even if service is less than 5 years.
Two Types of Formulas:
- Covered Under Act (10+ employees): (Basic + DA) × 15 × Years of Service ÷ 26
- Not Covered (Less than 10): (Basic + DA) × 15 × Years of Service ÷ 30
Maximum Limit: Government has capped maximum gratuity at ₹20,00,000 (20 lakhs). Even if your calculation shows ₹30 lakhs, you’ll get only ₹20 lakhs.
Tax Benefits:
- • Covered under Act: Up to ₹20 lakhs is 100% tax-free
- • Not covered: Up to ₹10 lakhs is tax-free
- • Amount beyond limit is added to income and taxed as per your slab
When is Gratuity Paid? On resignation, retirement, death, or disability/accident making employee unfit for work. Payment must be made within 30 days of becoming due.
Important Notes:
- • Service period is rounded – 5 years 7 months = 6 years
- • Only Basic + DA is considered, not HRA, Conveyance, etc.
- • Gratuity can be forfeited if employee is terminated for misconduct
- • Gratuity is compulsory for companies, not optional