Gratuity Calculator
Calculate your gratuity payout as per the 1972 Act.
Total Gratuity Payable
Calculation Breakdown
Last Salary
Rounded Years
15-Day Wage
What is Gratuity?
Gratuity is a monetary benefit given by an employer to an employee as a token of appreciation for their long-term service. It is governed by the Payment of Gratuity Act, 1972.
The Gratuity Formula
The standard formula for gratuity calculation in India is:
- Last Salary: Basic Pay + Dearness Allowance (DA).
- 26: Number of working days in a month.
- 15: Wages for 15 days per completed year of service.
Key Rules (Eligibility & Rounding)
1. The 5-Year Rule
You are eligible for gratuity only after completing 5 continuous years of service with the same employer.
Exception: In case of death or disablement, the 5-year rule does not apply.
2. Rounding of Service Years
If you have worked for more than 6 months in your last year, it is rounded up to the next full year.
Example: 10 years 7 months = 11 years.
Example: 10 years 4 months = 10 years.
3. Tax Exemption
Gratuity received is tax-free up to ₹20 Lakhs for employees covered under the Act. Any amount above this limit is taxable.