Estimate gratuity from your last wages and years of service, with the formula used under the Payment of Gratuity Act.
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Calculated from your inputs
Illustrative capped gratuity
Formula amount before cap
Service years used
How this is calculated
Illustrative wage × 15 ÷ 26 × service years, with an extra year for service exceeding six additional months. Apply your entered cap. This does not determine statutory eligibility, wage definitions, fixed-term exceptions, applicable labour-code rules or tax exemption.
Defaults are editable examples, not current provider quotes. Results are rounded for display. These are scenarios from your inputs, not live market data or investment advice.
Gratuity is a lump sum an employer pays an employee when they leave after long service, retire, or on death or disablement. For employers covered by the Payment of Gratuity Act, it is fifteen days’ wages for every completed year of service.
How the Gratuity calculator works
Gratuity = Last monthly wages × 15 ÷ 26 × Years of service
Wages here mean basic pay plus dearness allowance. A final part-year of more than six months counts as a full year. The result is limited to the cap you enter.
Employers not covered by the Act may use a different formula, and the labour codes change some rules, such as eligibility for fixed-term employees.
Worked example
Example inputs
Applicable monthly wages
₹50,000
Completed service years
10
Additional completed months
7
Applicable gratuity cap
₹20,00,000
Calculated result
Illustrative capped gratuity
₹3,17,307.69
Formula amount before cap
₹3,17,307.69
Service years used
11
Why use a Gratuity calculator?
Estimate what you may receive when you leave or retire.
Check an employer’s gratuity calculation.
Gratuity calculator FAQs
After how many years is gratuity payable?
Under the Payment of Gratuity Act, usually after five years of continuous service, though the condition does not apply on death or disablement. The labour codes allow fixed-term employees to qualify sooner.
Why divide by 26?
The formula treats a month as 26 working days, so 15 ÷ 26 of a month’s wages is fifteen days’ pay.
Is there a maximum gratuity?
Yes. The Act sets a ceiling, and the tax exemption has its own limit for non-government employees. Enter the cap that applies to you.
Is gratuity taxable?
Government employees’ gratuity is exempt. For others it is exempt up to a limit, and the rest is taxed as salary. Check the current rules.