Gratuity Calculator
Calculate your retirement benefit as per the Payment of Gratuity Act, 1972.
*Minimum 5 years required for eligibility.
Eligibility Rules
- Must complete 5 years of service.
- 15 days salary for every year.
- Max limit: ₹20 Lakhs.
What is Gratuity?
Gratuity is a monetary benefit given by an employer to an employee in recognition of their long-term service. In India, it is governed by the Payment of Gratuity Act, 1972. It is usually paid at the time of retirement, resignation, or termination after completing at least 5 years of continuous service.
How to Use the Gratuity Calculator?
Calculating your gratuity is simple with our tool. Follow these steps:
- Enter Basic Salary + DA: Input your last drawn monthly basic salary plus dearness allowance.
- Enter Years of Service: Provide the total number of years you have worked with the organization.
- Click Calculate: The tool will immediately show your estimated gratuity amount.
Example Calculation:
If your last drawn Basic + DA is ₹50,000 and you have served for 10 years:
Gratuity = (15 * 50,000 * 10) / 26 = ₹2,88,461
Frequently Asked Questions (FAQ)
1. Is gratuity taxable in India?
For government employees, gratuity is fully tax-exempt. For private-sector employees, it is exempt up to ₹20 Lakhs under current tax laws.
2. What is the minimum service period for gratuity?
An employee must complete at least 5 years of continuous service with the same employer to be eligible for gratuity.
3. How is the 26-day factor calculated?
The law assumes 26 working days in a month (excluding 4 Sundays). Thus, the daily wage is calculated as (Monthly Salary / 26).