Gratuity Calculator
Gratuity is a lump sum monetary benefit paid by an employer to an employee for services rendered. It is governed by the Payment of Gratuity Act, 1972 . Use this tool to estimate your payout based on your last salary and tenure. Updated for 2025 with the latest tax exemption limit of ₹20 Lakhs .
Do not include HRA, Special Allowance, or Bonus.
Rule: Service of 6 months or more in the final year is rounded off to a full year. (e.g., 5 years 7 months = 6 years).
Total Gratuity Payable
🤔 Did You Know?
Even if the company goes bankrupt, your Gratuity must be paid before other debts. It is a statutory right protected by law.
View Official Act (CLC Govt)🧮 How is Gratuity Calculated?
The standard formula for employees covered under the Act is:
- Last Salary: Basic Pay + Dearness Allowance (DA).
- 15/26: Represents 15 days of wages for every completed year, considering 26 working days a month.
- Rounding Off: Service of more than 6 months in a year is counted as a full year (e.g., 7 years 7 months = 8 years).
❓ Frequently Asked Questions
What is the eligibility for Gratuity? ▼
You are eligible for Gratuity if you have completed at least 5 years of continuous service with the same employer. In cases of death or disablement, the 5-year rule is waived, and the amount is paid to the nominee.
Is Gratuity taxable? ▼
For government employees, it is fully tax-free. For private employees covered under the Act, it is tax-free up to ₹20 Lakhs (Lifetime limit). Any amount above this limit is taxed as per your income slab.
Does Gratuity include HRA? ▼
No. Gratuity is calculated only on the Basic Pay and Dearness Allowance (DA). Allowances like HRA, LTA, Medical, or Special Allowance are not included in the calculation.