Gratuity calculator
See what gratuity could be due when you leave a job. Move the sliders or type your own numbers.
₹2,76,923
- Years counted
- 8 years
- Before the ₹20 lakh ceiling
- ₹2,76,923
This calculator gives estimates for learning. Real rates, charges and returns vary, and nothing here is advice or a recommendation. Read the disclaimer.
How gratuity is worked out
The formula is 15 ÷ 26 × last drawn monthly wages × completed years of service. The 15 is the number of days of wages for each year, and 26 is the number of working days in a month. A part year of more than six months is counted as a full year, so 8 years and 7 months counts as 9.
Gratuity is generally paid after five years of continuous service, with exceptions such as death or disablement. The Labour Codes in force from 21 November 2025 also provide for fixed-term employees. Rules and your employer’s terms can differ, so check your appointment letter and ask your employer before you rely on the number.
Common questions
How is gratuity calculated?
Under the Payment of Gratuity Act the amount is 15 days of your last drawn wages for each completed year of service, with a wage month counted as 26 days. So gratuity = 15 ÷ 26 × last drawn monthly wages × years of service. A part year of more than six months counts as a full year.
Which salary counts for gratuity?
Basic pay and dearness allowance count. Bonus, commission, overtime and most other allowances generally do not. Enter your monthly basic plus dearness allowance in the box.
Is there a limit on gratuity, and is it taxed?
The ceiling is ₹20 lakh. Up to the exempt limit the tax rules treat gratuity from a private employer covered by the Act as tax-free, and the exempt amount is the least of the formula amount, ₹20 lakh and the amount you receive. Check your own situation, because the rules differ if your employer is not covered by the Act.