Gratuity Calculator Calculate Your Retirement Benefit
Calculate gratuity as per the Payment of Gratuity Act, 1972
Plan your retirement better by calculating your gratuity amount based on your salary, years of service, and expected increments. Get accurate projections as per Indian laws.
Gratuity Calculator
Calculate your gratuity amount based on Indian laws
26 for organizations covered under the Act, 30 for others
💡 Tip: Gratuity is calculated as (Last drawn salary × Years of service × 15) / 26 for organizations covered under the Act.
Understanding Gratuity in India
What is Gratuity?
- A lump sum amount paid by employer to employee as a token of appreciation
- Governed by the Payment of Gratuity Act, 1972
- Payable to employees on retirement, resignation, or termination
- Applicable to organizations with 10+ employees
Eligibility Criteria
- Minimum Service: 5 years of continuous service
- Exceptions: Death or disability (no minimum service required)
- Maximum Limit: ₹20 lakhs (as of 2025)
- Calculation Base: Last drawn salary (basic + DA)
Calculation Formula
- For organizations covered: (Last drawn salary × Years of service × 15) / 26
- For others: (Last drawn salary × Years of service × 15) / 30
- Salary Component: Basic salary + Dearness Allowance (DA)
- Rounding: 6+ months counted as 1 year
Tax Implications
- Tax Exempt: Government employees (fully exempt)
- Private Sector: Exempt up to ₹20 lakhs (if continuous service ≥5 years)
- Section 10(10): Provides tax exemption under Income Tax Act
- Amount Above Limit: Taxable as per income tax slab
Important Notes
- This calculator provides estimates. Actual gratuity may vary based on company policy and regulatory changes.
- Gratuity must be paid within 30 days of becoming due. Interest is payable for delayed payments.
- In case of termination due to misconduct, gratuity can be forfeited in part or full.
- The maximum gratuity limit was increased to ₹20 lakhs from ₹10 lakhs in 2010.