Gratuity Calculator 2026 — Payment of Gratuity Act

Enter your service details

Last Drawn Salary Basic + DA, per month

Years of Service Completed, e.g. 7.5

Is your organisation covered under the Gratuity Act?

The 5-year minimum service rule doesn't apply in case of death or disablement of the employee.

How gratuity is calculated

Under the Payment of Gratuity Act, 1972, an employee who completes at least 5 years of continuous service is entitled to gratuity on leaving the organisation — whether by resignation, retirement or termination (not applicable in cases of misconduct).

Category	Formula
Covered under the Act	(15 × Last Salary × Years) ÷ 26
Not covered under the Act	(15 × Last Salary × Years) ÷ 30

"Last Salary" means Basic + Dearness Allowance only, not your full CTC. The statutory cap on tax-exempt gratuity for employees covered under the Act is currently ₹20,00,000.

If you leave before completing 5 years of continuous service, you're generally not eligible for gratuity — except in case of death or disablement.

FAQs

Is gratuity taxable?

Gratuity received by government employees is fully tax-exempt. For private-sector employees covered under the Act, it's exempt up to the statutory limit; amounts above that are taxable as salary income.

Does gratuity get paid if I resign?

Yes, as long as you've completed the minimum 5 years of continuous service, gratuity is payable regardless of whether you resign, retire, or are terminated for reasons other than misconduct.

How is "years of service" rounded?

A period of more than 6 months in the last year of service is generally rounded up to a full year for the purposes of this calculation. Less than 6 months in the final year is typically ignored.