Gratuity Calculator (India)
Estimate your gratuity from your wages and years of service, for permanent or fixed-term employees, with or without gratuity-law coverage.
This is an estimate. Your actual gratuity depends on your employer's policy and the law in force when you leave. See our Disclaimer.
Last reviewed: — formulas, eligibility and the ₹20 lakh cap confirmed.
The formula
Covered by the law: gratuity = last drawn wages (basic + DA) × 15 ÷ 26 × years of service. For a permanent employee, a final period of more than 6 months counts as a full year. For a fixed-term employee the gratuity is pro-rata to the actual service period.
Not covered: gratuity = average monthly salary of the last 10 months × 15 ÷ 30 × completed years only, with no rounding up.
The amount is capped at ₹20,00,000.
The 50% wage rule
Under the labour codes, if allowances and other excluded components are more than 50% of your total pay, the excess is added back to wages. If you enter your total monthly pay, the calculator uses the higher of basic + DA and 50% of total pay as wages.
Worked example
Permanent employee, covered, basic + DA of ₹50,000 a month, 10 years of service: 50,000 × 15 ÷ 26 × 10 = ₹2,88,462 (rounded). With 10 years and 8 months the service counts as 11 years, giving ₹3,17,308.
Eligibility
A permanent employee generally needs at least 5 years of continuous service, except on death or disablement. A fixed-term employee needs at least 1 year, with gratuity pro-rata to the service period.
Limitations
The calculator estimates the gratuity amount, not how much is exempt from income tax; the tax treatment depends on your employer type and the rules in force.
More worked examples
Covered, permanent, ₹50,000 wages. A final period of 6 months is not rounded up: 10 years 6 months counts as 10 years and gives ₹2,88,462. Make it 10 years 7 months and it counts as 11 years, giving ₹3,17,308. The rule is strictly more than 6 months.
Fixed-term, covered, ₹40,000 wages, 1 year 6 months: service counts as 1.5 years, so the gratuity is 40,000 × 15 ÷ 26 × 1.5 = ₹34,615.
Not covered, ₹50,000 average salary, 10 years 11 months: only the 10 completed years count, so the gratuity is 50,000 × 15 ÷ 30 × 10 = ₹2,50,000.
The cap and the wage rule in numbers
Basic + DA ₹2,50,000 and 30 years gives ₹43,26,923 by the formula, which the tool caps at ₹20,00,000 and says so in a note.
With basic + DA ₹30,000 and total pay ₹90,000, half of total pay is ₹45,000, so wages are raised to ₹45,000. For 8 years the gratuity is ₹2,07,692 instead of ₹1,38,462.
Errors you may see
- Less than 5 years of service for a permanent employee, such as 4 years 11 months, returns the minimum-service message. A fixed-term employee needs 1 year, so 0 years 11 months is also rejected.
- Months must be between 0 and 11. Salary must be above zero.
- If total monthly pay is below basic + DA, the tool shows "Total monthly pay cannot be less than basic + DA." The total pay box is ignored for an employer not covered by the law.
Frequently asked questions
Why is the divisor 26?
A month is treated as 26 working days (30 days minus four Sundays). Gratuity is 15 days of wages for each year of service.
Is gratuity taxable?
Part or all of it may be tax-exempt, depending on whether you are a government employee, whether your employer is covered by the law, and the statutory limit. Check current rules on incometax.gov.in.
What if I have less than the minimum service?
A permanent employee is normally not eligible, except on death or disablement. Fixed-term employees need at least one year, with gratuity pro-rata to their service.
Does 5 years 7 months count as 6 years?
For a permanent employee at a covered employer, yes: a final stretch of more than 6 months counts as a full year. At exactly 6 months it does not. A fixed-term employee is paid for the exact service, and an uncovered employer counts completed years only.
What does the total pay field do?
It is optional and applies the 50% wage rule. If half of the total pay is higher than basic + DA, the calculator uses half of the total pay as wages.
What is the highest gratuity this tool will show?
₹20,00,000. If the formula gives more, the result is capped at that figure and a note says so.