100% Accurate Formula
Gratuity Calculator
⚡ LIVE UPDATE: Tax-free limit increased to ₹25 Lakhs for 2026-2027.
Gratuity is a lump sum benefit paid by your employer. Use this tool to calculate your payout based on the Payment of Gratuity Act, 1972. Check your eligibility, tax exemption limit (₹25 Lakhs (Updated as DA crossed 50%)), and understand the 15/26 rule.
Employment Details
₹
Include Basic Pay & Dearness Allowance only. Exclude HRA, Bonus, etc.
Yrs
Calculation Logic Applied:
For Covered employees, >6 months is rounded to 1 full year. Formula: (Salary × 15/26 × Years).
Total Gratuity Payable
₹0
Tax Exempted Amount
₹0
Taxable Amount
₹0
*Lifetime tax exemption limit for Gratuity is ₹25 Lakhs (Updated as DA crossed 50%).
Tax Breakdown
📌 How is Gratuity Calculated?
For Employees Covered Under the Act:
Gratuity = Last Salary × 15/26 × Tenure
Note: Tenure of more than 6 months in the last year is rounded up to a full year.
For Employees NOT Covered Under the Act:
Gratuity = Last Salary × 15/30 × Tenure
Note: Only perfectly completed years are counted. Months are ignored.
🔍 People also search for
Gratuity Calculator India
Gratuity Formula 2026
25 Lakh Gratuity Exemption Rule
Calculate Gratuity on Resignation
15/26 Gratuity Rule
Not covered under gratuity act calculator
Gratuity Rules: Frequently Asked Questions
What is the maximum tax-free limit for Gratuity in 2026?
Because the Dearness Allowance (DA) crossed 50%, the government has increased the maximum tax-exempt limit for gratuity from ₹20 Lakhs to ₹25 Lakhs under the Payment of Gratuity Act.
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 continuous service rule is waived, and the amount is paid directly to the nominee or employee.
Is Gratuity taxable in India?
For government employees, gratuity is fully tax-free. For private sector employees covered under the Payment of Gratuity Act, the payout is completely tax-free up to a lifetime limit of ₹25 Lakhs (Updated as DA crossed 50%). Any amount received above this ₹25 Lakh threshold is added to your taxable income and taxed as per your standard slab rate.
Does Gratuity calculation include HRA or Allowances?
No. Gratuity is strictly calculated only on the Basic Pay and Dearness Allowance (DA). Allowances like HRA (House Rent Allowance), LTA, Medical Allowance, Special Allowances, or annual bonuses are not included in the calculation.
What is the difference between Covered and Not Covered under the Act?
Covered: Employers with 10 or more employees usually fall under the Act. They use the (15/26) formula and round off the tenure (e.g., 5 years 7 months is considered 6 years).
Not Covered: Employers not falling under the Act use the (15/30) formula. Also, they do not round off the tenure (e.g., 5 years 11 months is considered strictly as 5 years).
Not Covered: Employers not falling under the Act use the (15/30) formula. Also, they do not round off the tenure (e.g., 5 years 11 months is considered strictly as 5 years).