Gratuity Calculator (India)
Calculate your gratuity using the standard 15/26 formula. The calculator rounds service the way the rule requires, checks eligibility, applies the ₹20 lakh limit and shows how much is tax-free.
Gratuity calculation
How to use this gratuity calculator
- Enter your last drawn basic salary plus dearness allowance per month.
- Enter your years and extra months of service.
- Pick your employment type: covered by the gratuity law, fixed-term, or not covered.
- Tell the calculator if you have already used part of your ₹20 lakh tax-free limit with an earlier employer.
The gratuity formula
For employees covered by the law, gratuity = last drawn salary × 15 ÷ 26 × years of service. Last drawn salary means basic plus dearness allowance. The number 26 reflects the working days in a month, and 15 stands for 15 days of salary for each year.
When you have more than 6 months beyond a full year, the period is rounded up to the next year. If it is 6 months or less, it is rounded down. For employees not covered by the law, the common formula is last salary × 15 ÷ 30 × completed years, with no rounding of extra months.
Examples
| Situation | Years counted | Gratuity |
|---|---|---|
| Salary ₹60,000, service 8 years 4 months | 8 | ₹2,76,923 |
| Salary ₹60,000, service 8 years 7 months | 9 | ₹3,11,538 |
| Salary ₹60,000, 8 years, not covered by the law (15/30) | 8 | ₹2,40,000 |
Notice how seven months of service adds more than ₹34,000, because the period is rounded up to a full year.
Eligibility and recent changes
- Five years of continuous service is the normal requirement. The condition is waived if the employee dies or becomes disabled.
- Fixed-term employees now become eligible after just one year of service, on a pro-rata basis, under the Code on Social Security, 2020, which came into force on 21 November 2025.
- Payment limit: the maximum gratuity payable under the law is ₹20 lakh.
- Timing: employers are expected to pay within 30 days of the employee leaving.
- Salary structure: the new labour codes expect basic pay to be a larger share of total remuneration, which may increase the salary used for gratuity. Ask your employer how this applies to you.
Is gratuity taxable?
For private-sector employees covered by the law, gratuity is tax-free up to the lowest of the amount received, the formula amount and ₹20 lakh. The ₹20 lakh limit is a lifetime limit across employers, so earlier tax-free gratuity reduces what is left. Any amount above the limit is added to your salary and taxed at your slab rate. Government employees are fully exempt. The exemption applies in both tax regimes, and it continues under the Income-tax Act, 2025, though the section number has changed.
Tips
- Check your appointment letter and policy. Some employers pay more than the statutory minimum.
- Plan the timing of an exit. Completing 5 years, or tipping a period past 6 months into the next year, can raise gratuity significantly.
- Remember that gratuity is provided inside your CTC at about 4.81% of basic, so it is not extra money. See the CTC to in-hand salary calculator for how it fits into your pay.
Limitations
The calculator uses the monthly salary and service period you enter. It does not model unpaid leave, breaks in service, or company-specific rules. The formula for establishments not covered by the law can vary, so confirm with your HR or the policy document.
Frequently asked questions
What is the gratuity formula?
Last drawn basic plus DA, multiplied by 15, divided by 26, multiplied by years of service. For employees not covered by the law, the divisor is usually 30.
How many years do I need to get gratuity?
Five years of continuous service for most employees. Fixed-term employees qualify after one year. Death or disability waives the condition.
Is gratuity part of CTC?
Often yes. Employers provide for it at about 4.81% of basic, but you receive it only when you leave, so it is not part of monthly take-home.
What is the maximum gratuity?
The law caps payment at ₹20 lakh, and the same amount is the lifetime tax-free limit for private-sector employees.
Is gratuity taxable in the new tax regime?
The exemption applies in both regimes. Any amount above the exempt limit is taxed as salary income.
Last updated: 13 November 2026. This calculator is for education and estimation only and is not tax, legal or financial advice. Rules and interest rates change; verify the current position with the official source or a qualified professional before making decisions.