Gratuity Calculator
Calculate your gratuity payout under the Payment of Gratuity Act, 1972.
Minimum 5 years to be eligible
≥6 months rounds up to next year
Gratuity Amount
₹2,88,462
Private formula: 50,000 × 15/26 × 10 yrs
Tax-Free Amount
₹2,88,462
Exempt up to ₹20L
Taxable Amount
₹0
Fully exempt
Service Counted
10 years
No rounding
Key Rules
- • Minimum 5 continuous years of service required
- • If last year has ≥ 6 months, it counts as a full year (private sector)
- • Tax exemption ceiling: ₹20,00,000 (Budget 2023 limit)
- • Applicable to organisations with 10+ employees
- • Payable on resignation, retirement, death, or disablement
For reference only. Actual gratuity depends on employer policy and applicable law.
Gratuity Calculator — India 2025
Gratuity is a valuable retirement benefit that rewards employee loyalty. Our calculator supports both private sector (15/26 formula) and government/public sector (1/4 formula) employees. Enter your last drawn basic+DA salary and years of service to instantly see your gratuity amount, how much is tax-free (up to ₹20 lakh), and the taxable portion if any.
Frequently Asked Questions — Gratuity
What is gratuity and who is eligible?
Gratuity is a lump-sum payment made by an employer to an employee as a token of appreciation for long service. Under the Payment of Gratuity Act, 1972, employees who have completed at least 5 continuous years of service at an organisation with 10 or more employees are eligible.
What is the gratuity formula for private employees?
For private sector employees under the Gratuity Act: Gratuity = (Last drawn Basic + DA) × 15/26 × Number of years of service. The 15/26 factor represents 15 days out of 26 working days in a month. Example: Basic+DA = ₹50,000, 10 years: Gratuity = ₹50,000 × 15/26 × 10 = ₹2,88,462.
What is the gratuity formula for government employees?
Government employees use a different formula: Gratuity = Last drawn salary × (1/4) × completed 6-month periods. For a 20-year service with ₹80,000 basic: 6-month periods = 40. Gratuity = ₹80,000 × 0.25 × 40 = ₹8,00,000.
What is the tax-free gratuity limit in India?
The tax-free gratuity limit is ₹20,00,000 (₹20 lakh) for private sector employees as per the amendment effective from 2019. For government employees and public sector employees, gratuity is fully exempt from tax without any limit. Any amount above ₹20 lakh is added to income and taxed at slab rates.
Is there a maximum gratuity limit?
There is no statutory maximum for gratuity payment — employers can pay more than the calculated amount. The ₹20 lakh tax-free limit applies only for income tax exemption, not as a cap on the actual gratuity payable. Many companies pay gratuity above this limit, with the excess being taxable.
Disclaimer: Gratuity calculation is indicative. Consult HR and a tax advisor for exact entitlements.
Related Articles
View all →PM-KISAN Registration Process for New Farmers — Documents Required
Register for PM-KISAN scheme as a new farmer. Know required documents and process.
Pradhan Mantri Vaya Vandana Yojana (PMVVY): Should You Invest ₹15 Lakh with LIC?
Invest in PMVVY with LIC. Is it a good option for ₹15 lakh investment?
Post-Matric Scholarship for SC Students: Eligibility, Amount, and How to Apply
Post-matric scholarship for SC students. Check eligibility, amount and apply.
How to Check Your PMAY Application Status Online in 2025
Check PMAY status online easily. Track your application now in 2025.