Gratuity calculator
Estimate the gratuity you have earned from your last drawn salary and years of service, using the standard 15/26 formula.
How gratuity is calculated
The 15/26 represents 15 days of salary for every completed year, based on 26 working days a month. A part year over six months counts as a full year. The result is capped at the ₹20 lakh tax-free limit, and you usually need five years of service to qualify.
FAQs about gratuity
How is gratuity calculated in India?
For employees covered by the Gratuity Act, gratuity = (15 ÷ 26) × last drawn monthly salary × years of service. Salary here means basic pay plus dearness allowance.
When am I eligible for gratuity?
You generally qualify after completing five years of continuous service with the same employer. The five-year rule is waived if service ends due to death or disablement.
How are part years counted?
A year is counted in full if you worked more than six months in it; six months or less is ignored. For example, 7 years and 8 months counts as 8 years.
Is there a maximum gratuity amount?
Yes. The tax-free gratuity limit is ₹20 lakh. Anything above that may be taxable, so this tool caps the result at ₹20,00,000.
What salary should I enter?
Use your last drawn monthly basic pay plus dearness allowance — not your full CTC or in-hand salary.
Is gratuity taxed?
Gratuity up to ₹20 lakh is exempt for most private employees, and fully exempt for government employees. Amounts above the limit can be taxable.