Gratuity Calculator

How gratuity is calculated

For employees covered by the Payment of Gratuity Act, the formula is Gratuity = (Basic + DA) × 15 ÷ 26 × years of service. The 15/26 represents 15 days' wages for every completed year, based on a 26-day working month. A part-year of six months or more counts as a full year.

Eligibility and cap

You're eligible after five years of continuous service (waived in case of death or disablement). Gratuity is tax-free up to ₹20 lakh; anything above that is taxable.

Note: this covers employees under the Act. Some organisations pay more generously under their own policy, in which case use your company's formula.