Gratuity calculator
Estimate the gratuity payable under the Payment of Gratuity Act, 1972 — the (salary × 15 × years) ÷ 26 formula, the five-year eligibility rule and the ₹20 lakh ceiling. Formula and ceiling from the Act, checked on October 28, 2026; an estimate, not advice.
Calculate your gratuity
Six months or more in the final year counts as a full year.
Estimated gratuity
₹3,46,154
Based on 10 completed years at (salary × 15 × years) ÷ 26.
An estimate for an employee covered by the Payment of Gratuity Act, 1972, using basic + DA. Not a payslip or advice.
How the formula works
Gratuity rewards long service. For an employee covered by the Act, it is fifteen days' wages for every completed year, taking the month as 26 working days: (last drawn basic + DA) × 15 × years ÷ 26. A year of service beyond the last whole year counts in full if it is six months or more. The total is capped at ₹20 lakh, and gratuity up to that ceiling is exempt from income tax under section 10(10).
The Payment of Gratuity Act is being subsumed into the Code on Social Security, 2020; confirm the current position and ceiling before you rely on a figure.
Related
Frequently asked questions
How is gratuity calculated in India?
For an employee covered by the Payment of Gratuity Act, 1972: gratuity = (last drawn salary × 15 × completed years of service) ÷ 26, where salary is basic pay plus dearness allowance. The 15 is fifteen days' wages for each year, and 26 is the working days in a month. The result is capped at ₹20 lakh.
When am I eligible for gratuity?
After five years of continuous service with the same employer. The five-year rule is waived where service ends on the employee's death or disablement. Gratuity is payable on resignation, retirement or termination once eligible.
How are part-years of service treated?
Service beyond the last completed year counts as a full year if it is six months or more, and is ignored if it is less. So 5 years and 7 months is treated as 6 years, while 5 years and 4 months is treated as 5.
Is gratuity taxable?
Gratuity up to the ₹20 lakh ceiling is exempt from income tax under section 10(10) for covered employees; anything above is taxable. This calculator estimates the amount payable, not the tax — confirm the current ceiling and your position with a professional.
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Sources
Thresholds and rates are set by statute and notification and change over time. Every figure here was checked on October 28, 2026; verify the current position on the official source before you rely on it. This is general information, not advice.
- The Payment of Gratuity Act, 1972 (clc.gov.in)The 15/26 gratuity formula, the five-year eligibility rule and the ₹20 lakh ceiling.
Run this in payroll with HelloTime
Gratuity, bonus, PF and ESI are payroll — computed and filed in HelloTime, the payroll & attendance product in the HelloBooks suite, with the entries posting into your HelloBooks books. HelloBooks itself is the accounting and GST software; it does not run payroll or file PF/ESI returns. These calculators are estimates, not payslips.