Gratuity Calculator
Estimate the gratuity you'll receive when you leave your job: the statutory 15/26 formula with 6-month rounding and the ₹20 lakh tax-free ceiling, per the Payment of Gratuity Act, 1972.
6 or more extra months round up to a full year under the Act.
Your gratuity
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| Years counted (after rounding) | — |
| Formula: 15/26 × basic × years | — |
| Payable (capped at ₹20,00,000) | — |
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Gratuity, explained in one minute
Gratuity is a lump-sum thank-you payment your employer owes you when you leave after 5+ years of service. For every completed year, you earn 15 days of your last drawn basic + DA, computed on a 26-day working month, hence the 15/26 factor. It's paid on resignation, retirement, death or disablement, and is tax-free up to ₹20 lakh over your lifetime for employees covered by the Act.
Because many companies bake a ~4.81% gratuity provision into CTC, an offer's headline number can overstate what you'll actually see if you leave early. Check what your offer really pays month-to-month with the in-hand salary calculator.
Frequently asked questions
How is gratuity calculated in India?
For employees covered by the Payment of Gratuity Act, 1972: Gratuity = (15 ÷ 26) × last drawn monthly basic + DA × completed years of service. Service beyond 6 months in the final year rounds up to a full year. Example: ₹50,000 basic and 10 years 7 months of service = 15/26 × 50,000 × 11 ≈ ₹3,17,308.
When am I eligible for gratuity?
After 5 years of continuous service with the same employer (several court rulings accept 4 years 240 days). The 5-year rule is waived in case of death or disablement. Gratuity is payable on resignation, retirement, or termination, not while you are still employed.
Is gratuity taxable?
For private-sector employees covered by the Act, gratuity is tax-free up to the least of: ₹20 lakh (lifetime limit), the actual amount received, or the 15/26 formula amount. Government employees’ gratuity is fully exempt. Any excess is taxed as salary.
Is gratuity part of my CTC?
Many employers include a gratuity provision (~4.81% of basic) inside your CTC even though you only receive it after 5 years. If you leave before 5 years, that CTC component is simply money you never got. Factor this in when comparing offers with our in-hand salary calculator.
Why 15/26 in the gratuity formula?
The Act pays 15 days of wages for every completed year of service, and a working month is counted as 26 days (30 days minus 4 weekly offs). So each year of service earns you 15/26 ≈ 57.7% of one month’s basic + DA.