Gratuity Calculator
Calculate your gratuity amount as per the Payment of Gratuity Act, 1972 — for private sector employees with 5+ years of service.
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How to use this calculator
- 1
Enter your last drawn Basic Salary + DA (not total CTC — gratuity is calculated on basic + DA only).
- 2
Enter your completed years and any additional months of service.
- 3
If your additional months are 6 or more, the year is rounded up.
- 4
Gratuity is payable only after completing 5 years of continuous service.
Frequently asked questions
What is the gratuity formula?
For employees covered under the Payment of Gratuity Act: Gratuity = (15 × Last Basic Salary + DA × Years of Service) ÷ 26. The "26" represents working days in a month (excluding 4 Sundays). For employees not covered by the Act, some companies use ÷ 30 instead.
Is 5 years of service mandatory?
Yes — gratuity is payable only after completing 5 years of continuous service. However, in case of death or disability, gratuity is paid regardless of the service period.
Is gratuity taxable?
Gratuity received by private sector employees is tax-exempt up to ₹20 lakh (revised 2023). Any amount above ₹20 lakh is added to income and taxed at your applicable slab rate. For government employees, the full gratuity amount is tax-exempt.
When must the employer pay gratuity?
Gratuity must be paid within 30 days of it becoming payable. Delayed payment attracts simple interest at the rate notified by the government (currently 10% p.a.).
Gratuity Calculator India — Payment of Gratuity Act Formula
Who is eligible for gratuity?
Any employee (factory worker, mine worker, plantation worker, or employee of any establishment with 10+ employees) who has completed 5 years of continuous service is entitled to gratuity under the Payment of Gratuity Act, 1972. The 5-year threshold does not apply in cases of death or disability.
Gratuity vs PF vs leave encashment
Gratuity is a one-time benefit from the employer upon separation after 5+ years. PF (EPF) is a retirement savings account with monthly contributions from both employee and employer. Leave encashment is payment for unused earned leave. All three are separate entitlements under different laws.
Forfeiture of gratuity
An employer can forfeit gratuity (fully or partially) if an employee is terminated due to wilful omission, negligence, or misconduct causing loss to the employer, or if the employee is convicted under certain offences. Normal resignation does not forfeit gratuity rights.
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Results are estimates for informational purposes only and do not constitute professional financial, medical, legal, or technical advice. Read full disclaimer →