Gratuity Calculator
Estimate your gratuity from your last drawn salary and years of service, using the Payment of Gratuity Act formula.
About this calculator
Gratuity is a lump-sum reward employers pay for long service. This free gratuity calculator uses the statutory formula under the Payment of Gratuity Act to estimate what you are owed from your last drawn salary and length of service.
The formula
Gratuity = 15 × last drawn salary × years of service ÷ 26, where the salary is basic pay plus dearness allowance and 26 represents the working days in a month. A part-year of six months or more rounds up to a full year.
Worked example
With a last drawn salary of ₹50,000 and 10 years of service, gratuity = 15 × 50,000 × 10 ÷ 26 ≈ ₹2,88,462.
Planning your finances after leaving a job? See the salary calculator for in-hand pay or the PPF calculator for tax-free savings.
Why use this gratuity calculator
Uses the statutory formula
It applies the Payment of Gratuity Act formula — 15 days' pay for every completed year, on your last drawn basic plus DA — for an accurate entitlement.
Handles the eligibility rule
Gratuity generally needs five years of continuous service; the tool makes the years-of-service effect on the amount clear.
Tax-free cap noted
It reflects that gratuity is tax-exempt up to the ₹20 lakh ceiling for covered employees, so you know what is actually in hand.
Common use cases
- Estimate the gratuity due when you resign or retire
- Check the payout difference between leaving at 5 vs 10 years
- Verify the gratuity amount in your full-and-final settlement
- Factor gratuity into your retirement corpus planning
Frequently asked questions
For employees covered by the Payment of Gratuity Act: Gratuity = 15 × last drawn salary (basic + DA) × years of service ÷ 26, where 26 is the number of working days in a month.
You generally need at least 5 years of continuous service, except in cases of death or disablement. A part-year of 6 months or more counts as a full year.
The last drawn monthly salary, counting only basic pay plus dearness allowance (DA) — not HRA, bonuses or other allowances.
Gratuity is tax-exempt up to ₹20 lakh for covered employees. Amounts above the applicable exemption are added to your income and taxed.
No. The calculation runs entirely in your browser and nothing is uploaded.
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