Gratuity Calculator
Calculate your gratuity as per the Payment of Gratuity Act, 1972
Basic salary + Dearness Allowance (DA). Do not include HRA or other allowances.
Minimum 5 years of continuous service required for gratuity eligibility
Gratuity amount
—
Monthly salary used
—
Years of service
—
Taxable amount
—
Max tax-free limit
₹20 Lakh
—
About Gratuity
What is gratuity?
Gratuity is a lump sum amount paid by an employer to an employee as a token of appreciation for the services rendered. It is governed by the Payment of Gratuity Act, 1972 and is mandatory for organisations with 10 or more employees.
Formula for gratuity
For covered employees: Gratuity = (Last salary × 15 × Years of service) ÷ 26. The factor 15 represents 15 days per year, and 26 represents the number of working days in a month.
Is gratuity taxable?
Gratuity received by government employees is fully tax-exempt. For private sector employees covered under the Act, gratuity up to ₹20 lakh is tax-free. Any amount above ₹20 lakh is taxable as income.