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Gratuity Calculator
Estimate your gratuity from your last drawn monthly Basic + DA and years of service, check the 5-year eligibility rule and see the tax-exempt and taxable parts.
Gratuity under the Payment of Gratuity Act: 5-year eligibility, 15/26 formula and the ₹20 lakh tax-exempt limit.
Free to run · to save projections to your live dashboard
Enter values and click Calculate to see results
Worked example
Calculated by the same engine as the calculator above.
- Inputs
- Last Drawn Monthly Basic + DA
- ₹80,000
- Years of Service
- 10
- Result
- Gratuity Amount
- ₹4,61,538
- Tax-Exempt (up to ₹20 lakh)
- ₹4,61,538
- Taxable Gratuity
- ₹0.00
- Years Counted
- 10
Formula
G = S × 15 × Y / 26; exempt = min(G, ₹20,00,000); taxable = G - exempt
- G = gratuity amount
- S = last drawn monthly salary (basic plus dearness allowance)
- Y = completed years of service; a part year of more than 6 months counts as a full year
- 15 / 26 = 15 days' wages out of 26 working days in a month
Assumptions
- Uses the 15/26 formula for employees covered by the Payment of Gratuity Act.
- Gratuity is payable only after 5 years of continuous service; below that the calculator shows no amount. Payment on death or disablement before 5 years is not modelled.
- Up to ₹20 lakh is treated as tax-exempt and any amount above it as taxable salary income. Employees not covered by the Act, and government employees, follow different rules.
- Tax on the taxable part depends on your slab and is not calculated.
- Educational estimate only, not financial advice. Capitallytics does not execute transactions.
Gratuity Calculator FAQ
Answers about how this calculator works.
What salary should I enter for gratuity?
Enter your last drawn monthly basic salary plus dearness allowance, as that is what the gratuity formula uses. Other allowances are usually excluded.
Why is the formula divided by 26?
Gratuity counts 15 days' wages for each year of service, and a month is treated as 26 working days. So one year is worth 15/26 of a monthly salary.
Am I eligible for gratuity before 5 years?
Under the Act, gratuity is payable after 5 years of continuous service, or earlier only on death or disablement. Enter fewer than 5 years and the calculator explains this instead of showing an amount.
How much gratuity is tax-free?
Up to ₹20 lakh over your career is exempt for employees covered by the Act. The calculator shows the exempt part and any taxable amount above the limit.
How are part years counted?
A part year of more than 6 months counts as a full year, so 10 years 7 months counts as 11 years. 6 months or less is dropped.