Gratuity Calculator — India Employment Gratuity
Calculate how much gratuity you are entitled to under India's Payment of Gratuity Act 1972 (amended 2018). Enter your last drawn Basic + DA salary, years of service, and coverage type.
Coverage under Gratuity Act
(Basic + DA) × 15 × years ÷ divisor
₹288,462
GratuityGratuity (final)
48.1%
Salary × 12 (annual)
51.9%
- 1
Numerator (salary × 15 × years)
50,000 × 15 × 10 = 7,500,000 - 2
Raw gratuity ÷ divisor
7,500,000 ÷ 26 = 288,462Divisor is 26 — working days per month for covered employees.
How does this calculator work?
Gratuity (India) = (Basic + DA) × 15 × years ÷ 26 for covered employees; ÷ 30 for non-covered. Minimum 5 years of continuous service for covered employees. The payout is capped at ₹20 lakhs (2018 amendment). Only Basic Salary + DA goes into the formula — not HRA, PF, or other allowances.
Formula
How this is calculated
Gratuity is a statutory end-of-service payment in India, mandated by the Payment of Gratuity Act 1972 for establishments with 10 or more employees. The formula for covered employees is (Last drawn salary × 15 × Years of service) ÷ 26, where "last drawn salary" includes only Basic Salary and Dearness Allowance (not HRA, PF contributions, or other allowances), 15 represents 15 days' salary, and 26 represents the number of working days per month (30 days minus 4 Sundays). The result is capped at ₹20,00,000 as per the 2018 amendment.
For employees in organisations not covered by the Act (fewer than 10 employees, or voluntary/contractual gratuity), the denominator is 30 instead of 26, and the ₹20 lakh statutory cap does not apply — though the income-tax exemption limit remains ₹20 lakhs. The minimum continuous service for eligibility in covered organisations is 5 years; exceptions apply in cases of death or disability. Fractional service years: if the last partial year exceeds 6 months it is rounded up to the next whole year.
The figures above are editable estimates based on the 2018 amendment. Always verify your entitlement with your HR department or payslip, as individual contracts and company policies can offer higher (but not lower) gratuity than the statutory minimum.
Frequently asked questions
Only Basic Salary and Dearness Allowance (DA) are included. House Rent Allowance (HRA), provident fund contributions, medical allowances, bonus, and other variable components are excluded from the gratuity base.
The statutory maximum is ₹20,00,000 (₹20 lakhs) for employees covered by the Payment of Gratuity Act (as of the 2018 amendment). Employers can voluntarily pay more. The income-tax exemption limit for gratuity is also ₹20 lakhs.
For employees covered by the Gratuity Act, gratuity up to ₹20 lakhs is fully exempt from income tax. Amounts above ₹20 lakhs are taxable. For government employees, the entire gratuity is exempt. Non-government, non-covered employees have a different (lower) exemption limit — check the current Income Tax Act provisions for the precise limit.
Also known as
TG we-Calculate Editorial Team. (2026). Gratuity Calculator — India Employment Gratuity [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/gratuity-calculator
TG we-Calculate Editorial Team. "Gratuity Calculator — India Employment Gratuity." TG we-Calculate. 2026. https://we-calculate.com/calculator/gratuity-calculator.
TG we-Calculate Editorial Team, "Gratuity Calculator — India Employment Gratuity," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/gratuity-calculator
@misc{wecalculate_gratuity_calculator, title = {Gratuity Calculator — India Employment Gratuity}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/gratuity-calculator}}, year = {2026}, note = {TG we-Calculate} }
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