Gratuity Calculator
Find out how much gratuity you are entitled to receive. Accurate calculations as per the Payment of Gratuity Act.
Most private sector employees are covered under the Payment of Gratuity Act, 1972.
Minimum 5 years of continuous service is required for gratuity eligibility.
Total Gratuity Payable
₹0
Tax Exempt
₹0
Taxable Amount
₹0
Note:
- Gratuity is tax-free up to ₹20 Lakhs for non-government employees.
- For government employees, the entire gratuity amount is tax-free.
- The calculation formula depends on whether the employer is covered under the Payment of Gratuity Act.
Understanding Gratuity in India
Gratuity is a defined benefit plan and is one of the many retirement benefits offered by the employer to the employee upon leaving his job. It is governed by the Payment of Gratuity Act, 1972.
Eligibility Criteria
- Employee should be eligible for superannuation.
- Employee retires.
- Employee resigns after working for 5 years with a single employer.
- In case of death or disablement due to accident or disease (5-year rule not applicable).
The Formula
Gratuity = (15 × Last Drawn Salary × Tenure) / 26
Where:
• 15 represents 15 days' wages
• 26 represents working days in a month
• Salary = Basic + DA
Example:
Salary: ₹50,000 | Tenure: 10 Years
Gratuity = (15 × 50,000 × 10) / 26
= ₹2,88,461
Taxation on Gratuity
The tax treatment of gratuity depends on the type of employee:
- Government Employees: Fully tax-exempt.
- Private Employees (Covered under Act): Least of the following is exempt:
- Actual gratuity received
- ₹20 Lakhs
- 15 days' salary × years of service
- Private Employees (Not covered under Act): Least of the following is exempt:
- Actual gratuity received
- ₹20 Lakhs
- Half month's average salary × years of service