Gratuity Calculator India
Calculate estimated gratuity payout based on last drawn basic salary and completed years of service.
Calculation Breakdown
Calculation Formula & Methodology
Calculated per Payment of Gratuity Act 1972 assuming 15 days of salary for every completed year of service based on a 26-day working month.
What is Gratuity?
Gratuity is a monetary reward paid by an employer to an employee for rendering continuous service for 5 or more years upon resignation, retirement, or termination.
Gratuity Formula Breakdown
Formula: Gratuity = (15 × Last Drawn Salary × Tenure in Years) / 26. Months over 6 months are rounded up to the next full year.
Example Gratuity Calculation
Last drawn Basic + DA = ₹50,000 for 7 years of service:
The full payout of ₹2,01,923 is completely tax-exempt under the statutory ₹20 Lakh cap.
Gratuity Rules & Limits
5-Year Minimum Service
Continuous 5-year service is mandatory except in cases of death or disablement.
₹20 Lakh Tax Exemption Cap
Gratuity up to ₹20,00,000 is 100% tax-free for non-government employees.
Frequently Asked Questions
Under court rulings, 4 years and 240 days (or >6 months in 5th year) qualifies as 5 completed years of service.
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