Finance
Gratuity Calculator
Calculate gratuity under the Payment of Gratuity Act, 1972.
INR
years
Gratuity Amount
₹2,88,462payable
Within the tax exemption limit of ₹20,00,000.
Monthly Salary₹50,000
Years of Service10.0
Gratuity Payable₹2,88,462
Finance
Calculate gratuity under the Payment of Gratuity Act, 1972.
Gratuity Amount
₹2,88,462payable
Within the tax exemption limit of ₹20,00,000.
Gratuity is a lump-sum cash payout that employers give employees who resign, retire, or are laid off after completing a minimum service period. In India, the legal gratuity amount depends on basic salary, years worked, and whether the Gratuity Act applies. It is not the same as severance pay or notice period compensation—it is a statutory benefit governed by the Payment of Gratuity Act, 1972.
The calculator multiplies your basic monthly salary by the number of years of completed service, then applies the gratuity formula. For employees with 5+ years of service under the Gratuity Act, the standard formula is: (Basic Salary + Dearness Allowance) × (Years of Service) ÷ 26. Some employers use custom gratuity policies that may be more generous. The tool also handles partial years—if you have worked 4 years and 6 months, it counts as 4 completed years (not rounded up).
(Basic Salary + Dearness Allowance) × Years of Service ÷ 26Basic Salary is your fixed monthly pay excluding performance bonuses. Dearness Allowance (DA) is a separate component included if you receive it. The number 26 is the statutory divisor under the Payment of Gratuity Act. The result is the total gratuity payable.
| Input | Result | Notes |
|---|---|---|
| Basic Salary: ₹50,000/month, DA: ₹10,000/month, Service: 10 years | ₹23,076.92 | Calculation: (50,000 + 10,000) × 10 ÷ 26 = 600,000 ÷ 26 = ₹23,076.92 |
| Basic Salary: ₹30,000/month, DA: ₹5,000/month, Service: 5 years | ₹6,730.77 | You must have completed 5 years to be eligible; this is the minimum threshold for statutory gratuity. |
| Basic Salary: ₹75,000/month, DA: ₹15,000/month, Service: 20 years | ₹69,230.77 | Longer service periods significantly increase the total gratuity payout. |
You must complete 5 years of continuous service to be eligible for statutory gratuity under the Payment of Gratuity Act, 1972. However, some companies offer gratuity for shorter tenures based on their own policies.
No. HRA is typically excluded from the basic salary used for gratuity calculation. Use only your fixed basic pay plus dearness allowance (if applicable).
Only completed years count. You would have 3 years of service, not 4. You need to complete the 5th year to claim statutory gratuity.
No. If you have completed 5 years, your employer is legally required to pay gratuity under the Gratuity Act. Refusal is a breach of labor law.
No. Gratuity is a statutory benefit based on salary and service length. Severance pay is an additional amount sometimes given during lay-offs or restructuring, at the employer's discretion.
Statutory gratuity applies only to salaried employees. Freelancers and contractors are typically not covered unless their engagement terms explicitly include a gratuity clause.