Gratuity Calculator (2026)

What is Gratuity?

Gratuity is a lump-sum monetary benefit paid by an employer to an employee as a token of gratitude for services rendered to the organisation. It is a statutory benefit governed in India by the Payment of Gratuity Act, 1972, and is paid at the time of retirement, resignation, superannuation, or in the event of death or disablement of the employee.

Gratuity Formula

For employees covered under the Payment of Gratuity Act, 1972:

Here, 15 represents 15 days' wages for every completed year of service, and 26 is the number of working days considered in a month. Any period of service beyond 6 months is rounded up to the next full year.

For employees not covered under the Act, employers usually calculate gratuity as:

Who Can Use This Calculator?

• Salaried employees working in private companies, factories, mines, and shops
• Government and public sector employees
• HR professionals and payroll teams estimating employee benefits
• Employees planning retirement, resignation, or a job switch
• Anyone wanting to understand their gratuity entitlement before leaving a job

Eligibility for Gratuity

• An employee must have completed at least 5 years of continuous service with the same employer (this condition is relaxed in case of death or disablement).
• The organisation must have 10 or more employees on any day in the preceding 12 months.
• Gratuity becomes payable on retirement, resignation, superannuation, death, or disablement due to accident or disease.

How to Use the Gratuity Calculator

1. Select whether you are Covered or Not Covered under the Payment of Gratuity Act, 1972.
2. Enter your last drawn Basic Salary + DA in rupees.
3. Enter the total number of years of service completed with your employer.
4. Click the Calculate Gratuity button to instantly view your estimated gratuity amount.

Where Is This Used?

This calculation is useful during salary negotiations, retirement planning, resignation settlements, full and final (F&F) settlement calculations by HR departments, long-term financial planning, and while comparing job offers where gratuity forms part of the overall cost-to-company (CTC).

Things to Keep in Mind

• The maximum tax-exempt gratuity amount under current income tax rules is capped at ₹20 lakh.
• This calculator gives an estimate only; the exact amount depends on your employer's policy and applicable state rules.
• Gratuity is separate from Provident Fund (PF) and is not deducted from your monthly salary.

Disclaimer: This content is for informational purposes only and does not constitute financial or legal advice. Please consult your HR department or a financial advisor for exact figures.