Gratuity Calculator
Gratuity is paid by the employer after 5 years of continuous service. Tax-free up to ₹20 lakh under the Payment of Gratuity Act, 1972.
Your details
Minimum 5 years required
Most private-sector employers with 10+ employees are covered.
After 10 years of service
Formula
(₹50,000 × 15 × 10) / 26 = ₹2,88,462
Frequently asked questions
Who is eligible for gratuity?
+
Any employee who has completed 5+ years of continuous service with the same employer, under the Payment of Gratuity Act, 1972. Gratuity is also payable on death/disability even before 5 years.
What is the formula?
+
Covered under the Act: (Last drawn salary × 15 × Years of service) / 26, where salary = Basic + DA. Not covered: (Last salary × 15 × Years) / 30.
Is gratuity taxable?
+
Gratuity up to ₹20 lakh (cumulative across employers) is tax-free. Anything above is taxed as salary. Government employees get full exemption without the cap.
What counts as 'years of service'?
+
Completed years of continuous service. Fractions above 6 months are rounded up; less than 6 months are ignored. So 7 years 7 months = 8 years; 7 years 5 months = 7 years.
Related calculators
Other tools that pair well with this one.