Gratuity Calculator is a lump-sum payment given by an employer to an employee as a token of appreciation for long-term service. Learn how to calculate it easily online.
Gratuity Calculator (India 2025)
Calculate Your Gratuity
Gratuity Calculation Examples
| Last Salary (Monthly) | Years of Service | Gratuity Amount |
|---|---|---|
| ₹30,000 | 10 | ₹173,076 |
| ₹50,000 | 15 | ₹432,692 |
| ₹25,000 | 7 | ₹101,923 |
| ₹75,000 | 20 | ₹865,385 |
Frequently Asked Questions
What is the formula of gratuity?
The gratuity formula is: (Last drawn salary × 15 × Years of service) ÷ 26. Last drawn salary includes basic salary plus dearness allowance. For example, with ₹30,000 salary and 10 years service: (30,000 × 15 × 10) ÷ 26 = ₹173,076.
Who is eligible for gratuity in India?
Employees in establishments with 10 or more workers are eligible after completing 5 years of continuous service. This applies to factories, mines, oilfields, plantations, ports, railways, shops, and other covered establishments.
Is gratuity taxable?
Gratuity received by government employees is fully exempt from tax. For private sector employees, the least of the following is exempt: actual gratuity received, ₹20 lakh, or 15 days’ salary for each completed year of service.
What is the minimum years of service for gratuity?
The minimum service period for gratuity eligibility is 5 years of continuous service. This applies to both voluntary resignation and termination, except in cases of death or disablement where the 5-year rule doesn’t apply.
Is gratuity available for private sector employees?
Yes, private sector employees are covered under the Payment of Gratuity Act if their establishment employs 10 or more persons. The Act applies to factories, mines, plantations, ports, railways, shops, and other establishments.
Is gratuity given on basic or gross salary?
Gratuity is calculated on the sum of basic salary and dearness allowance. Other components like HRA, bonuses, commissions, or overtime are not included in the salary calculation for gratuity purposes.
What is the maximum gratuity limit in India?
The maximum gratuity amount payable under the Act is ₹20 lakh. This limit was increased from ₹10 lakh to ₹20 lakh effective March 29, 2018, through an amendment to the Payment of Gratuity Act.
How to calculate gratuity after resignation?
Gratuity after resignation is calculated the same way: (Last drawn salary × 15 × Years of service) ÷ 26. You become eligible only after completing 5 years of continuous service with the same employer.
Is gratuity different from PF?
Yes, gratuity and PF (Provident Fund) are different. Gratuity is paid by the employer as a retirement benefit, while PF is a contributory fund where both employee and employer contribute. Gratuity requires 5+ years of service, while PF has no minimum service period.
Can gratuity be claimed after termination?
Yes, gratuity can be claimed after termination if you’ve completed 5 years of continuous service. You should apply within 30 days of becoming eligible. If the employer doesn’t pay, you can approach the controlling authority under the Gratuity Act.
💡 What is a Gratuity Calculator?
A Gratuity Calculator helps employees calculate the amount of gratuity they will receive from their employer after completing a specific period of service.
It works on the official formula defined under the Payment of Gratuity Act, 1972.
👉 Formula:
Gratuity = (Last Drawn Salary × 15 × Years of Service) ÷ 26
This means if your last drawn salary (Basic + DA) is ₹40,000 and your total service period is 10 years, your gratuity will be around ₹2,30,769.
🧾 What is Gratuity?
Gratuity is a financial benefit given by an employer to an employee as a token of gratitude for their continuous service.
It’s usually paid:
- When you resign after 5+ years
- When you retire
- Or in case of death or disability (before 5 years also eligible)
It’s a one-time lump-sum payment and a major part of an employee’s retirement savings in India.
⚙️ Gratuity Calculator Formula (2025 Update)
The formula for calculating gratuity remains the same as per the government rule:
| Component | Description |
|---|---|
| Last Drawn Salary | Basic Pay + Dearness Allowance |
| Years of Service | Completed full years with the company |
| 26 | Standard working days in a month |
✅ Formula:
Gratuity = (15 × Last Drawn Salary × Years of Service) ÷ 26
🧮 Example Calculation
If your basic salary is ₹50,000 and you have worked for 8 years:
(15 × 50,000 × 8) ÷ 26 = ₹2,30,769 (approx.)
So, you will receive ₹2.3 lakhs as gratuity.
📱 Use Free Gratuity Calculator Online
You can use our Gratuity Calculator tool above to calculate your exact gratuity amount instantly.
It is:
- 100% Free
- Accurate as per government formula
- Mobile-friendly & quick
Simply enter your last drawn salary and years of service, and click on “Calculate Gratuity” to see your result.
🪜 How to Use Gratuity Calculator (Step-by-Step)
- Enter your last drawn basic salary + DA
- Enter your total years of service
- Click on Calculate Gratuity
- View your instant result in Indian Rupees
This simple process ensures 100% accurate estimation.
🧰 Eligibility Criteria for Gratuity
| Requirement | Details |
|---|---|
| Minimum Service | 5 years continuous service |
| Employer Type | Private / Government |
| Condition | Resignation, Retirement, or Death |
| Act Covered | Payment of Gratuity Act, 1972 |
💸 Gratuity Rules (As per 2025 Updates)
- You must complete 5 years of continuous service (except in case of death/disability).
- The amount is 15 days’ salary per completed year of service.
- The maximum tax-free limit for gratuity is ₹20 lakhs under the Income Tax Act.
- Gratuity is payable even if you resign voluntarily.
- If the employee passes away, the nominee or family receives the amount.
📊 Benefits of Using Gratuity Calculator
- No manual calculation errors
- Based on latest government rules
- Works instantly on mobile and desktop
- Free to use, no signup needed
- Helps in retirement & financial planning
❓ Top 10 FAQs on Gratuity Calculator
1. What is Gratuity in salary?
Gratuity is a lump-sum amount given by the employer to the employee for their long-term service, as per the Payment of Gratuity Act, 1972.
2. How to calculate gratuity manually?
Use this formula: (Last Drawn Salary × 15 × Years of Service) ÷ 26
3. Who is eligible for gratuity?
Employees with at least 5 years of continuous service are eligible, except in death/disability cases.
4. Is gratuity taxable?
Yes, but it is tax-free up to ₹20 lakhs for government and private sector employees under Section 10(10) of the Income Tax Act.
5. Is gratuity part of CTC?
Sometimes it is included in your CTC; it depends on the company’s policy.
6. Can I get gratuity if I resign before 5 years?
Usually, no. But some companies offer ex-gratia benefits voluntarily.
7. What happens to gratuity if I change jobs?
Each company calculates gratuity separately based on your tenure with them.
8. Is gratuity mandatory for employers?
Yes, for organizations with 10 or more employees under the Payment of Gratuity Act.
9. Can an employer refuse to pay gratuity?
No, gratuity payment is legally binding once eligibility conditions are met.
10. How long does it take to receive gratuity after leaving?
Generally, it takes 30 days after your last working day or retirement.
🏁 Conclusion
The Gratuity Calculator makes it simple for employees to estimate their retirement benefits instantly.
It follows the official government formula, ensuring 100% accuracy and compliance with both Bing and Google quality standards.
Use it today to plan your future with financial clarity and confidence.