Gratuity Calculator
Enter your basic pay and how long you've worked for your employer. You get the gratuity you're owed by the 15/26 formula, how much of it is tax-free, and how it grows with every extra year of service.
By Hardik Vegad, founder of WealthGamma · Last updated
Your gratuity
₹2,88,462
₹50,000 × 15 ÷ 26 × 10 years. Each year of service adds ₹28,846.
Monthly pay counted
₹50,000
Years counted
10
Tax-free part
₹2,88,462
Taxable part
₹0
| Years of service | Gratuity |
|---|---|
| 5 | ₹1,44,231 |
| 10 | ₹2,88,462 |
| 15 | ₹4,32,692 |
| 20 | ₹5,76,923 |
| 25 | ₹7,21,154 |
| 30 | ₹8,65,385 |
How is gratuity calculated?
Gratuity is 15 days of your last drawn pay for every year you worked, with a month counted as 26 working days. Pay here means basic pay plus dearness allowance.
Gratuity = (Basic pay + DA) × 15 ÷ 26 × Years of service
Worked through for ₹50,000 of basic pay and 10 years:
- ₹50,000 × 15 ÷ 26 = ₹28,846 for each year
- ₹28,846 × 10 years = ₹2,88,462
A final part-year of more than 6 months counts as a full year. So 7 years and 7 months is counted as 8 years and pays ₹2,30,769, while 7 years and 6 months is counted as 7 and pays ₹2,01,923.
How much gratuity will you get?
It depends on two things only: your last basic pay and your years of service. On ₹50,000 of basic pay, 5 years gives ₹1,44,231 and 20 years gives ₹5,76,923.
| Basic pay + DA | 5 years | 10 years | 20 years | 30 years |
|---|---|---|---|---|
| ₹25,000 | ₹72,115 | ₹1,44,231 | ₹2,88,462 | ₹4,32,692 |
| ₹50,000 | ₹1,44,231 | ₹2,88,462 | ₹5,76,923 | ₹8,65,385 |
| ₹75,000 | ₹2,16,346 | ₹4,32,692 | ₹8,65,385 | ₹12,98,077 |
| ₹1,00,000 | ₹2,88,462 | ₹5,76,923 | ₹11,53,846 | ₹17,30,769 |
* Limited to the ₹20L maximum under the law. Your employer may pay more.
Who is eligible for gratuity?
You are eligible once you have worked 5 years in a row for the same employer, if it has 10 or more employees. Gratuity is then paid when you resign, retire or are laid off.
- 4 years and 240 days. Courts have held that working 240 days in the fifth year counts as completing it.
- Death or disablement. The 5-year rule does not apply. Gratuity is paid for whatever service there was.
- Fixed-term employees. They qualify after 1 year, and are paid in proportion to the time served.
- Notice period. It counts as service, because you are still employed.
What changed in gratuity under the new labour codes?
The formula did not change. The Code on Social Security, 2020, in force since 21 November 2025, replaced the Payment of Gratuity Act and changed what goes into the formula:
- Pay has a floor. Basic pay plus DA can't be counted as less than half of your total pay. With ₹30,000 basic in a ₹1,00,000 package, gratuity for 10 years rises from ₹1,73,077 to ₹2,88,462.
- Fixed-term staff after 1 year. Two years on a fixed-term contract at ₹50,000 basic pays ₹57,692.
- The maximum stays. ₹20L is still the most the law requires and the tax-free limit.
To use the pay floor here, fill in "Total monthly pay". How your employer has restructured pay decides the real figure, so check your payslip.
What if your employer is not covered by the gratuity law?
Then gratuity is paid by company policy, and the usual formula divides by 30, not 26, and counts only completed years:
Gratuity = Average pay of the last 10 months × 15 ÷ 30 × Completed years
On ₹50,000 and 10 years, that is ₹2,50,000, against ₹2,88,462 under the law. Pick "Not covered" in the calculator to use it.
Is gratuity taxable?
For private-sector employees, gratuity is tax-free up to ₹20L across your whole working life. Anything above that is added to your income and taxed at your slab rate.
- Government employees. Gratuity is fully tax-free.
- Lifetime limit. Gratuity from earlier employers counts toward the same ₹20L.
- While still employed. Gratuity paid during service, not at the end of it, is fully taxable.
On 30 years of service, the formula crosses ₹20L once basic pay is above about ₹1,15,556 a month. Check the current rules before you file.
What does this gratuity calculator leave out?
It works out the amount by the standard formulas. It doesn't count:
- Better company terms. Some employers pay more than the law requires.
- Earlier gratuity. Amounts already received, which use up the tax-free limit.
- Seasonal and piece-rate work. These have their own rules.
- Future raises. Gratuity is paid on your last pay, so a raise lifts the amount for every past year.
Gratuity and EPF often arrive together. The EPF calculator shows the provident fund side.
Frequently asked questions
What is the gratuity calculation formula?
Gratuity = last drawn basic pay plus DA × 15 ÷ 26 × years of service. For ₹50,000 of basic pay and 10 years, that is ₹2,88,462. Employers not covered by the gratuity law divide by 30, not 26.
How many years of service are needed for gratuity?
5 years of continuous service with the same employer. Courts have treated 4 years and 240 days as enough. Fixed-term employees qualify after 1 year, and the 5-year rule does not apply on death or disablement.
Which salary is used to calculate gratuity?
Your last drawn basic pay plus dearness allowance. HRA, bonus and other allowances are left out, but under the new labour codes basic pay plus DA cannot be counted as less than half of your total pay.
What is the maximum gratuity amount?
₹20L. That is the most the law requires an employer to pay, and also the tax-free limit for private-sector employees. An employer can choose to pay more.
Is gratuity taxable?
For private-sector employees, gratuity is tax-free up to ₹20L over a lifetime, and anything above that is taxed at your slab rate. For government employees it is fully tax-free.
How are months counted in gratuity?
A final part-year of more than 6 months counts as one full year. So 7 years and 7 months counts as 8 years, while 7 years and 6 months counts as 7.
Do I get gratuity if I resign?
Yes, if you have completed 5 years of continuous service. Gratuity is paid on resignation, retirement, death or disablement. It can be forfeited only in specific cases, such as dismissal for serious misconduct.