Gratuity Calculator

Estimate gratuity payable on exit (Payment of Gratuity Act).

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Enter your last drawn basic + DA and years of service. We compute gratuity using the Payment of Gratuity Act formula (15/26) and flag any taxable portion above the ₹20 lakh exemption.

How gratuity works

Gratuity is a lump-sum benefit paid to employees as a reward for long service, governed by the Payment of Gratuity Act, 1972. It is paid on retirement, resignation (after 5+ years), death or disability. Employers contribute roughly 4.81% of basic salary every month towards a gratuity fund.

Gratuity formula

  • Covered under Act: Gratuity = (Last Basic + DA) × 15 ÷ 26 × Years of service
  • Not covered: Gratuity = (Last Basic + DA) × 15 ÷ 30 × Years of service

Worked examples

Last Basic + DAYearsGratuity
₹40,0005₹1,15,385
₹60,00010₹3,46,154
₹80,00015₹6,92,308
₹1,00,00020₹11,53,846
₹1,50,00025₹21,63,461 (₹20L exempt + ₹1.6L taxable)

Taxation

Gratuity is tax-exempt up to ₹20,00,000 (lifetime limit, Sec 10(10)). Anything above this amount is taxed as salary income. Government employees enjoy 100% exemption.