Gratuity Calculator. Know your payout.

For employers covered by the Payment of Gratuity Act, 1972 (establishments with 10 or more employees), gratuity = (15 × last drawn monthly salary × completed years of service) ÷ 26. The 15 represents 15 days of wages for each completed year, and 26 is the number of working days in a month after excluding Sundays. For employers outside the Act, the divisor is 30 instead of 26, which produces a smaller amount for the same salary and tenure. "Salary" means Basic pay plus Dearness Allowance, not gross CTC. This is the single most common mistake people make when estimating their own gratuity.

Yes, in almost all cases. Section 4 of the Act requires five years of continuous service before gratuity becomes payable on resignation, retirement, or termination. The five-year rule is waived only when service ends due to death or disablement, in which case gratuity is payable regardless of how long the employee worked. Courts in some jurisdictions have accepted 4 years and 240 days as satisfying the fifth year, following the Madras High Court view, but this is not applied uniformly across India, so treat a full five years as the safe threshold.

Under the Act, any period beyond six months in the final year is rounded up to a full year, and six months or less is ignored. So 10 years and 7 months counts as 11 years, while 10 years and 6 months counts as 10 years. That single month can be worth a meaningful sum: on a ₹50,000 basic-plus-DA salary, one extra counted year adds ₹28,846 to the payout. Employers not covered by the Act typically count only fully completed years with no rounding at all.

For non-government employees covered by the Act, gratuity is exempt under Section 10(10)(ii) up to the lowest of three amounts: ₹20 lakh, the actual gratuity received, or the amount produced by the statutory formula. The ₹20 lakh ceiling was raised from ₹10 lakh in March 2018 and is a lifetime limit across all employers, not a per-job limit. If you claimed ₹8 lakh exempt at a previous employer, only ₹12 lakh of headroom remains. Anything above the exempt amount is added to your income and taxed at your slab rate. Central and state government employees receive gratuity fully tax-free with no ceiling.

Yes. Gratuity is payable on resignation, retirement, superannuation, termination, death, or disablement, provided the five-year condition is met (or waived for death and disablement). Resigning does not forfeit it. The employer must pay within 30 days of it becoming due, and delayed payment attracts simple interest. Gratuity can be forfeited wholly or partly only in narrow circumstances set out in Section 4(6), such as termination for wilful damage to employer property, riotous conduct, or an offence involving moral turpitude committed during employment.