Gratuity Calculator
Work out the gratuity payable on retirement or resignation under the Payment of Gratuity Act, 1972, from your last drawn salary and years of service.
Researched by Mirza Seraj BaigFacts last checked against official sources on 7 September 2026Basic pay + dearness allowance only. Do not include HRA or other allowances.
More than 6 months counts as a full extra year.
Gratuity payable
₹2,59,615
≈ 2.60 lakh
- Years counted
- 10 years
- Formula divisor
- 26
- Statutory ceiling applied
- No
How this is calculated
For employees covered by the Payment of Gratuity Act, 1972: Gratuity = (15 × last drawn salary × completed years of service) ÷ 26, where salary means basic pay plus dearness allowance, and 26 represents the working days in a month. For employees not covered by the Act, the divisor is 30 instead of 26.
Frequently asked questions
How is gratuity calculated in India?
For employees covered by the Payment of Gratuity Act, 1972, gratuity is (15 × last drawn salary × completed years of service) ÷ 26. Last drawn salary means basic pay plus dearness allowance. The divisor 26 represents working days in a month.
How many years of service are needed for gratuity?
Gratuity generally becomes payable after five years of continuous service. The five-year condition does not apply where employment ends due to death or disablement.
How are part years counted for gratuity?
A period of more than six months in the final year is normally rounded up to a full year, while six months or less is ignored. This calculator follows that convention.
Is gratuity taxable?
Gratuity received by government employees is fully exempt. For other employees covered by the Act, exemption is subject to the limits in the Income-tax Act. Check the current exemption ceiling with the Income Tax Department or a qualified adviser before planning around it.