CalcGratuity Calculator
Estimate your gratuity payment in India based on the Payment of Gratuity Act, 1972. Inputs: years of service and last drawn basic salary.
Total Estimated Gratuity
Formula & Calculation
Gratuity = (Basic Salary + DA) * (15 / 26) * Completed Years of Service- Basic Salary + DA: Your last drawn basic salary including dearness allowance (if applicable).
- Completed Years of Service: The total number of years you have continuously worked (must be at least 5 years).
How to Use
- Enter your monthly last drawn basic salary.
- Specify the number of completed years of service.
- Check your total eligible gratuity amount (tax-free up to ₹25 Lakhs).
Gratuity is a retirement benefit defined under the Payment of Gratuity Act, 1972. It is a lump-sum payment made by employers as a token of appreciation for an employee's long-term service. Calczia's Gratuity Calculator lets you estimate your gratuity amount instantly.
Who Is Eligible for Gratuity in India?
An employee is eligible to receive gratuity if they have completed at least 5 completed years of continuous service with an organization. This rule applies to all establishments employing 10 or more people.
The Gratuity Formula
Gratuity is calculated using this standard formula:
Gratuity = (Last Drawn Basic Salary + DA) × (15 / 26) × Completed Years of Service
Here, 26 represents the working days in a month, and 15 represents the days of salary paid per year of service. Any service period exceeding 6 months in the final year is rounded up to a full year (e.g. 5 years and 7 months is counted as 6 years).
Tax Exemption Limit on Gratuity
For government employees, gratuity is fully tax-exempt. For private-sector employees covered under the Act, the tax exemption limit was raised in recent budgets to **₹25 Lakhs**. Any amount received above this threshold is taxable as part of your salary.
Frequently Asked Questions
Who is eligible for gratuity in India?
An employee is eligible for gratuity after completing at least 5 years of continuous service with an organization that has 10 or more employees.
What is the formula for calculating gratuity?
The gratuity formula is: (Last drawn Basic Salary + DA) * (15 / 26) * Number of completed years of service.
Is gratuity taxable in India?
Gratuity received by government employees is fully tax-exempt. For private-sector employees covered by the Act, it is tax-exempt up to a limit of ₹25 Lakhs.
Can gratuity be paid before 5 years?
The 5-year requirement is waived only in the unfortunate event of the employee's death or disablement due to an accident or disease.
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