Gratuity Calculator

Free Gratuity Calculator

This free online gratuity calculator works out the lump-sum gratuity an employee receives on leaving a job in India. Enter your last drawn salary (Basic + Dearness Allowance), your years of service and whether you’re covered under the Payment of Gratuity Act, and instantly see the amount payable. It’s free, accurate and runs entirely in your browser.

How to use the gratuity calculator

1. Enter your last drawn monthly salary — this means Basic pay plus Dearness Allowance (DA).
2. Enter your years of service with the employer (decimals are fine, e.g. 7.6 for 7 years 7 months).
3. Choose whether you are covered under the Payment of Gratuity Act — most companies with 10 or more employees are.
4. Click Calculate gratuity to see the amount, the years counted and the formula used.
5. Check the note on the ₹20,00,000 tax-exemption cap to see how much is tax-free.

How gratuity is calculated in India

For employees covered under the Payment of Gratuity Act, 1972, gratuity is (15 × last drawn salary × years of service) ÷ 26. The number 15 represents 15 days’ wages for each completed year, and 26 is treated as the number of working days in a month. Years of service are rounded to the nearest full year: if you served more than six months beyond a completed year you round up, otherwise you round down — so 7 years 7 months counts as 8 years, while 7 years 4 months counts as 7.

For employees not covered by the Act, the formula divides by 30 instead of 26 ((15 × last salary × years) ÷ 30) and only completed years are counted — any extra months are ignored. In both cases, gratuity is generally payable only after 5 years of continuous service (except on death or disablement). Under the Income Tax Act, gratuity up to ₹20,00,000 is tax-exempt over your lifetime; anything above that cap is taxable as salary income.

Frequently asked questions