CalcBit.
SalaryUpdated 2026-06-12

Gratuity Calculator

Calculate your gratuity amount based on last drawn salary and years of service. Free gratuity calculator for Indian employees.

Calculator widget coming soon. Use the information below to understand this tool.

OverviewHow It WorksFormulaExamplesBenefitsFAQRelated

What is Gratuity Calculator?

A gratuity calculator helps you estimate the gratuity amount you will receive from your employer. It uses the formula prescribed under the Payment of Gratuity Act, 1972.

How It Works

The calculator applies the standard gratuity formula: (Last drawn salary × 15/26 × completed years of service). For employees not covered under the Act, the formula uses 15/30 instead of 15/26.

Formula & Calculation Method

Gratuity = (Last drawn Basic + DA) × 15/26 × Years of service

15/26 represents 15 days wages for each completed year of service (26 working days per month). Minimum 5 years continuous service is required for eligibility.

Examples

Standard Gratuity Calculation

1Last drawn (Basic + DA): ₹60,000

2Years of service: 15

3Gratuity = 60000 × 15/26 × 15

4Gratuity amount: ₹5,19,231

Gratuity Amount: ₹5,19,231

Benefits

  • 1
    Retirement benefit from employer
  • 2
    Tax-free up to ₹20 lakh
  • 3
    Rewards long-term service
  • 4
    Financial security after retirement
  • 5
    Statutory right after 5 years

Common Use Cases

Retirement planningJob change evaluationFinancial goal settingTax planning

Expert Tips

  • 1
    Try to complete at least 5 years to qualify
  • 2
    Negotiate gratuity as part of your CTC
  • 3
    Understand your company's gratuity policy
  • 4
    Claim gratuity promptly after leaving

Common Mistakes to Avoid

  • !
    Not completing 5 years to qualify
  • !
    Ignoring gratuity in CTC calculations
  • !
    Not understanding tax implications on excess
  • !
    Forfeiture on termination for misconduct

Frequently Asked Questions

Find answers to common questions about this calculator below.

Gratuity = (Last drawn salary × 15/26 × Years of service). Salary = Basic + DA (Dearness Allowance). You are eligible after completing 5 years of continuous service.

Gratuity received by government employees is fully tax-exempt. For non-government employees covered under the Gratuity Act, gratuity up to ₹20 lakh is tax-free. Any amount above ₹20 lakh is taxable.

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