Eligibility CheckerTax ExemptionSalary ImpactYear-wise TableGrowth Projection

Smart Gratuity Calculator

Estimate your gratuity amount, check eligibility, and see tax exemption details. Adjust salary and service years — results and year-wise projections update instantly.

What is gratuity?

Gratuity is a one-time monetary benefit paid by an employer to an employee as recognition of their long service. Governed by the Payment of Gratuity Act 1972, it is calculated based on the last drawn Basic + Dearness Allowance and the total years of service. It is payable upon resignation after 5 years, retirement, disablement, or death.

This calculator uses the statutory formulas (15/26 for covered employees, 15/30 for others), automatically rounds up partial years with 6+ months, calculates the Section 10(10) tax-free portion up to ₹20 lakh, and projects your gratuity growth at future service milestones — all in real time, entirely in your browser with no data sent to any server.

How to use

1

Enter your last drawn Basic + DA

Type the monthly Basic salary plus Dearness Allowance at the time of leaving. Use preset chips or drag the slider for common values.

2

Set your service duration

Enter the completed years and remaining months of continuous service with the same employer. Partial years with 6+ months round up automatically.

3

Select your employment type

Choose 'Gratuity Act' if your employer has 10+ employees (uses ÷26 formula). Otherwise select 'Not Covered' (uses ÷30 formula).

4

Review eligibility, estimate & projections

See your gratuity estimate, eligibility status, tax-free portion, and the growth projection chart at 5/10/15/20/25/30 year service milestones.

Gratuity eligibility rules & tips

5-year service rule

You must complete 5 continuous years with the same employer. Service broken by resignation and rejoining resets the count.

Death or disablement exception

If an employee dies or becomes permanently disabled, gratuity is paid to the nominee regardless of how many years were completed.

Company threshold

The Payment of Gratuity Act applies to any establishment with 10 or more employees. Once the threshold is crossed, it applies permanently even if headcount later falls below 10.

Months matter at year-end

If you have served 4 years and 9 months, the final 9 months (>6) round up to 5 years — making you eligible and adding a full year to the calculation.

Voluntary gratuity above ₹20L

Employers may pay more than ₹20L voluntarily. The tax-free exemption, however, is capped at ₹20L. The excess is added to taxable income.

Plan your exit timing

If you are a few months short of 5 years or a half-year milestone, waiting can significantly increase your gratuity through the rounding-up rule.

How it works

Statutory Formula

Covered employees: Basic+DA × 15 ÷ 26 × years. Not covered: Basic+DA × 15 ÷ 30 × years. The 15/26 formula gives ~½ month's salary per year.

Rounding Rule

If the last partial year has 6 or more months, it counts as a full year. 7yr 8mo = 8 effective years. 7yr 3mo = 7 effective years.

Tax Exemption Logic

Tax-free = min(actual gratuity, ₹20L). Any amount above ₹20L is taxable as salary income. Government employees enjoy complete exemption with no ceiling.

Growth Projection

Future gratuity = projected salary × 15/divisor × projected years. Salary grows at the specified annual rate from today's Basic+DA.

Related tools

EPF Calculator

Calculate your EPF corpus alongside gratuity for a complete retirement picture.

NPS Calculator

Estimate NPS pension and corpus to complement your gratuity retirement planning.

Salary Calculator

Break down your CTC into in-hand salary, PF, and tax deductions.

Income Tax Calculator

Calculate tax liability to see how much of your gratuity above ₹20L you'll keep.

Frequently asked questions

Common questions about gratuity calculation, eligibility rules, and tax exemptions.

For employees covered under the Payment of Gratuity Act 1972: Gratuity = (Last Basic + DA) × 15 ÷ 26 × Number of service years. For employees not covered: the divisor is 30 instead of 26. If the last incomplete year has 6 or more months, it is rounded up to a full year. For example, an employee with 7 years 8 months is treated as 8 effective years.

Any employee who has completed at least 5 years of continuous service with the same employer is eligible for gratuity upon resignation, retirement, or termination (except in cases of dismissal for proven misconduct). In the event of death or disablement, the 5-year requirement is waived and gratuity is paid to the nominee.

For private sector employees, gratuity is tax-free up to ₹20 lakh (under Section 10(10) of the Income Tax Act). Government employees receive complete exemption. Any amount above ₹20 lakh is added to taxable income and taxed at the applicable slab rate. This calculator shows the tax-free and taxable portions for your estimate.

The standard requirement is 5 continuous years of service with the same employer. An exception exists for daily-wage and piece-rate workers where 4 years and 240 working days may qualify. The 5-year rule applies to all other salaried employees regardless of employment type (permanent, contract, or probationary).

Yes. Gratuity is calculated on the last drawn Basic + DA at the time of leaving. A higher salary at exit means a proportionally higher gratuity — a 10% salary increase raises gratuity by exactly 10%. This is why the calculator's salary impact insight shows the effect of a 10% Basic+DA increase on your current estimate.

The Act covers establishments with 10 or more employees (the threshold applies permanently once crossed). This includes factories, mines, oilfields, plantations, ports, railways, shops, and other establishments. Employees earning over ₹1,00,000/month are also covered. The formula for covered employees uses a divisor of 26 (working days per month).

The statutory ceiling under the Payment of Gratuity Act is ₹20 lakh (revised in 2018 from ₹10 lakh). An employer can voluntarily pay more than ₹20 lakh, but the tax exemption under Section 10(10) is limited to ₹20 lakh. Any gratuity above ₹20 lakh is considered taxable income.

No. All gratuity calculations run entirely in your browser using JavaScript. No salary figures, service duration, or any other inputs are transmitted to any server. You can use this tool offline once the page has loaded.