About the Gratuity Calculator
Our free Gratuity Calculator helps employees in India compute their statutory gratuity payout upon resignation, retirement, superannuation, or termination after completing the minimum qualifying service period. Gratuity is a monetary benefit given by an employer as a token of appreciation for services rendered.
How Gratuity is Calculated in India
Under the Payment of Gratuity Act, 1972, gratuity is calculated using the formula:
$$\text{Gratuity} = \frac{15 \times \text{Last Drawn Salary} \times \text{Completed Years of Service}}{26}$$
Where:
- Last Drawn Salary: Basic salary plus dearness allowance (DA) received by the employee immediately preceding retirement or resignation.
- Completed Years of Service: Any fraction of service exceeding 6 months is rounded up to the nearest full year (e.g., 5 years and 7 months is considered 6 years).
- 26 Days: Calculations are based on 26 working days in a month.
How to Use the Calculator
Simply enter your salary and service details or adjust the range sliders:
- Monthly Basic Salary + DA: Your last drawn basic monthly salary plus dearness allowance.
- Completed Years of Service: The total number of years you have successfully completed with the organization.
Click the Calculate button to instantly view your eligible service tenure, calculation basis, and estimated gratuity payout.
Frequently Asked Questions (FAQs)
What is the minimum service period required for gratuity?
An employee becomes eligible for gratuity after completing a minimum of 5 continuous years of service with the employer (except in cases of death or disablement where the 5-year rule does not apply).
Is gratuity taxable in India?
Gratuity received by government employees is entirely tax-free. For non-government employees covered under the Gratuity Act, gratuity is tax-free up to a statutory limit (currently capped at ₹20 Lakhs).
How is fractional service rounded off?
Under statutory rules, if your service period includes months in excess of 6 months, it is rounded up to the next full year. For example, 6 years and 8 months is counted as 7 years.
