Gratuity Calculator

Gratuity Calculator: Know Your Retirement Benefit

Our gratuity calculator computes the lump sum amount you will receive from your employer based on your last drawn salary and years of service. Gratuity is a key retirement benefit for salaried employees in India.

The gratuity amount calculator uses the standard formula: Gratuity = Last Drawn Salary × 15/26 × Years of Service. The maximum tax-exempt limit is ₹20 lakhs under Section 10(10) of the Income Tax Act.

Gratuity = Last Drawn Salary × 15/26 × Years of Service. Maximum exempt from tax: ₹20 lakhs.

Gratuity Calculation Examples

Example 1: Last drawn salary (Basic + DA) = ₹60,000, Service = 10 years

Gratuity = ₹60,000 × 15/26 × 10 = ₹3,46,154
Tax: Fully exempt (below ₹20 lakhs)

Example 2: Last drawn salary = ₹1,00,000, Service = 15 years

Gratuity = ₹1,00,000 × 15/26 × 15 = ₹8,65,385
Tax: Fully exempt (below ₹20 lakhs)

Frequently Asked Questions

What is gratuity?

Gratuity is a lump sum amount paid by employer to employee as a gesture of gratitude for long service. It is mandatory under the Payment of Gratuity Act, 1972 for employees who have served 5+ years continuously.

What is the gratuity formula?

Gratuity = Last Drawn Salary (Basic + DA) × 15/26 × Years of Service. The 15/26 represents 15 days salary out of 26 working days in a month.

Is gratuity taxable?

Gratuity up to ₹20 lakhs is exempt from tax under Section 10(10) for private employees. Government employees get full exemption. Amount above ₹20 lakhs is taxable as per income slab.

What is minimum service for gratuity?

Minimum 5 years of continuous service is required to be eligible for gratuity under the Payment of Gratuity Act. However, in case of death or disability, gratuity is paid regardless of service period.

Can I get gratuity before 5 years?

Yes, in special cases: resignation (some companies pay pro-rata), death of employee, or disablement. Some companies have their own gratuity policy that allows earlier payment.

Is gratuity part of CTC?

Yes, gratuity is typically part of CTC. It is shown as employer contribution. However, you receive it only after 5+ years of service or upon leaving the company.