Gratuity Calculator
Calculate gratuity payable under the Payment of Gratuity Act after 5+ years of service.
Written by Anil Gautam · Updated
How does the gratuity calculator work out the amount?
With the box for employers covered by the Payment of Gratuity Act ticked, the tool counts 15 days of wages for each year of service and treats a month as 26 working days: last monthly basic plus DA × 15 × years ÷ 26. For the starting values, ₹60,000 and 8 years, that is 60,000 × 15 × 8 ÷ 26 = ₹2,76,923. Untick the box and the tool divides by 30 and counts only completed years, giving ₹2,40,000 for the same inputs.
Gratuity law applies to establishments with ten or more employees, so untick the box only if your employer falls outside it. Salaries on the slider run from ₹10,000 to ₹5,00,000 in steps of ₹1,000, and service from 0 to 40 years in half-year steps.
How are part years of service counted?
The two modes treat a part year differently. For covered employers the tool rounds a fraction of 0.5 or more up to the next whole year, so 10.5 years at ₹40,000 counts as 11 and gives ₹2,53,846. With the box unticked it drops the fraction, so the same inputs count 10 years and give ₹2,00,000. Below 5 years the tool shows Not eligible yet in place of an amount, even at 4.5.
Because the slider moves in half-year steps, 0.5 is the only fraction it can show. For covered employers the law counts a final part year only when it is more than six months: 8 years and 7 months becomes 9 years, while exactly 8 years and 6 months stays at 8. Set the slider to the lower whole number in that case.
When is part of your gratuity taxable?
The tool subtracts ₹20 lakh from the gratuity and shows anything above it as taxable. For covered employers the formula crosses ₹20 lakh once monthly salary multiplied by years of service passes about ₹34.67 lakh. A salary of ₹1,50,000 for 25 years gives ₹21,63,462, of which ₹1,63,462 is shown as taxable.
The ₹20 lakh limit covers all gratuity received over your career, so tax-free gratuity from an earlier employer reduces what is exempt now, and the tool cannot see past payouts. Gratuity paid to central and state government employees is fully exempt, so the taxable line does not apply to them. To see how gratuity is built into a salary package, the CTC to In-Hand Salary Calculator lists it as a separate line.