Calculate Your Gratuity

Total Gratuity Amount
₹ 1,15,385
One Lakh Fifteen Thousand Three Hundred Eighty-Five
Last Basic Salary
₹
Thirty Thousand
10K 50 Lac
Years of Service
Years
5 40
Gratuity Breakdown:
Basic Salary Component
₹30,000
Service Multiplier
10 Years
Total Gratuity Payable
₹1,15,385

Gratuity Breakdown

Component Details Amount

What is Gratuity?

Gratuity is a lump sum amount paid by an employer to an employee as a token of appreciation for their service, typically upon retirement, resignation, or death, provided the employee has completed at least five years of continuous service. It is governed by the Payment of Gratuity Act, 1972 in India and is calculated based on the employee's last drawn basic salary and years of service.

How is Gratuity Calculated?

Gratuity is calculated using the following formula:

Gratuity = (Last Basic Salary × 15/26) × Years of Service

Where:

  • Last Basic Salary = Monthly basic salary last drawn by the employee
  • 15/26 = Proportion of 15 days' salary for each completed year, based on a 26-day working month
  • Years of Service = Total number of completed years of continuous service (partial years above 6 months are rounded up)

Key Features of Our Gratuity Calculator

Instant Calculation

Calculate your gratuity amount instantly with a user-friendly interface and minimal input requirements.

Accurate Results

Precise gratuity calculations based on the Payment of Gratuity Act, 1972, ensuring compliance with Indian laws.

Wide Salary Range

Supports basic salary inputs from ₹10,000 to ₹50 lakhs, catering to diverse income levels.

Flexible Tenure

Calculate gratuity for service periods ranging from 5 to 40 years, covering various employment durations.

Transparent Breakdown

View a clear breakdown of gratuity components, including basic salary and service multiplier, for full clarity.

Interactive Interface

Adjust inputs using sliders or text fields with real-time updates and visual charts for better understanding.

Gratuity Eligibility and Limits in India

Basic Salary Range Minimum Service Period Tax Exemption Limit Maximum Gratuity Payable
₹10,000 - ₹50,000 5 Years Up to ₹20 Lakh ₹20 Lakh
₹50,001 - ₹2,00,000 5 Years Up to ₹20 Lakh ₹20 Lakh
₹2,00,001 - ₹10,00,000 5 Years Up to ₹20 Lakh ₹20 Lakh
₹10,00,001 - ₹50,00,000 5 Years Up to ₹20 Lakh ₹20 Lakh

Factors Affecting Your Gratuity Amount

1. Last Basic Salary

Your last drawn basic salary is a key component of the gratuity calculation. Higher basic salaries result in larger gratuity amounts, as the formula directly multiplies this value.

2. Years of Service

The number of completed years of continuous service with the same employer significantly impacts your gratuity. A minimum of 5 years is required for eligibility, and longer service increases the payout.

3. Employment Type

Gratuity is applicable to employees covered under the Payment of Gratuity Act, 1972, typically in organizations with 10 or more employees. Contract or temporary workers may not always qualify.

4. Organization Policies

Some organizations may offer gratuity even to employees not covered by the Act, or provide additional benefits, but the statutory formula remains the standard for most calculations.

5. Tax Exemptions

Gratuity is tax-exempt up to ₹20 lakh for non-government employees, as per current laws. Amounts exceeding this limit are taxable, affecting the net gratuity received.

Tips to Maximize Your Gratuity Benefits

1. Ensure Continuous Service

Complete at least 5 years of continuous service with the same employer to become eligible for gratuity under the Payment of Gratuity Act, 1972.

2. Monitor Salary Components

Since gratuity is calculated based on your basic salary, negotiate a higher basic salary during appraisals to increase your gratuity payout.

3. Understand Employer Policies

Check if your employer offers gratuity benefits beyond the statutory requirements, as some organizations provide enhanced gratuity schemes.

4. Plan for Tax Exemptions

Gratuity up to ₹20 lakh is tax-exempt for non-government employees. Plan your finances to optimize tax benefits within this limit.

5. Maintain Employment Records

Keep accurate records of your service period and salary slips to ensure correct gratuity calculations during retirement or resignation.

Ready to Calculate Your Gratuity?

Use our easy-to-use gratuity calculator to estimate your gratuity amount instantly based on your basic salary and years of service!

Calculate Now - Get Instant Results

Frequently Asked Questions

Get answers to common questions about gratuity in India

Gratuity is a lump sum payment made by an employer to an employee as a token of appreciation for their service, governed by the Payment of Gratuity Act, 1972. Employees who have completed at least 5 years of continuous service with an organization employing 10 or more people are eligible upon retirement, resignation, or death.

The general eligibility criteria for gratuity include:
  • Employment in an organization with 10 or more employees.
  • Minimum of 5 years of continuous service with the same employer.
  • Gratuity is payable upon superannuation, retirement, resignation, or death/disablement due to accident or disease.
  • Basic salary and service records must be verifiable for accurate calculation.
Specific conditions may vary based on employer policies.

Gratuity is calculated using the formula: (Last Basic Salary × 15/26) × Years of Service. The last drawn basic salary is multiplied by 15/26 (representing 15 days' salary for a 26-day working month) and then by the number of completed years of service. Partial years exceeding 6 months are rounded up.

For non-government employees, gratuity is tax-exempt up to ₹20 lakh under the Income Tax Act. Any amount exceeding this limit is taxable. For government employees, gratuity is fully tax-exempt. Always consult a tax professional for specific advice.

No, under the Payment of Gratuity Act, 1972, a minimum of 5 years of continuous service is required to be eligible for gratuity, except in cases of death or disablement due to accident or disease, where this condition may be relaxed.

If you switch jobs before completing 5 years with an employer, you are generally not eligible for gratuity from that employer. The 5-year continuous service requirement applies to each employer separately, unless your organization has a specific policy allowing otherwise.

Yes, a gratuity calculator is an excellent tool for estimating your gratuity amount based on your basic salary and years of service. It helps you plan your retirement or resignation finances by providing a clear picture of the lump sum you may receive.