Gratuity Calculator
Calculate your gratuity amount based on monthly salary, years of service, and dearness allowance.
₹
₹5000₹500000
yrs
5 yrs40 yrs
₹
₹0₹200000
Gratuity Amount
₹3,17,308
Last Drawn Salary
₹55,000
Calculation Breakdown
Basic Salary₹50,000
Dearness Allowance₹5,000
Last Drawn Salary (Basic + DA)₹55,000
Years of Service10 years
Formula: (15 x ₹55,000 x 10) / 26₹3,17,308
Gratuity Calculation Formula
Under the Payment of Gratuity Act 1972, the gratuity formula is:
Gratuity = (15 × Last Drawn Salary × Years of Service) / 26
Last Drawn Salary = Basic Salary + Dearness Allowance = ₹50,000 + ₹5,000 = ₹55,000
15 represents 15 days of wages for each completed year. 26 is the number of working days in a month (30 minus 4 Sundays).
For 10 years of service with a last drawn salary of ₹55,000, your gratuity is ₹3,17,308.
Frequently Asked Questions
What is gratuity and who is eligible?
Gratuity is a lump sum paid by an employer to an employee for services rendered. Under the Payment of Gratuity Act 1972, employees who have completed at least 5 years of continuous service are eligible.
How is gratuity calculated?
Gratuity = (15 x Last drawn salary x Years of service) / 26. Last drawn salary means basic salary plus dearness allowance. 15 represents 15 days wages and 26 represents working days in a month.
What is the maximum gratuity limit?
The maximum gratuity under the Act is Rs 20,00,000 (Rs 20 lakh). This was revised from Rs 10 lakh in 2018. Employers can pay more voluntarily, but tax exemption is capped at Rs 20 lakh.
Is gratuity taxable?
For government employees, gratuity is fully exempt. For private sector employees, gratuity up to Rs 20 lakh is exempt under Section 10(10).
Do I get gratuity if I resign?
Yes, you are eligible for gratuity if you resign after completing 5 or more years of continuous service. In case of death or disability, the 5-year minimum does not apply.