Calculator
Estimate the gratuity you will receive on resignation or retirement, plus the portion that's tax-free.
Employment Coverage
Gratuity Payable
₹2,88,462
Capped at ₹20,00,000
Tax-Exempt Portion
₹2,88,462
Taxable Portion
₹0
Added to your income; taxed at slab
Gratuity Payable
₹2,88,462
Any employee who has completed five years of continuous service with the same employer is eligible. The rule is relaxed in case of death or disablement — the five-year condition is waived. Apprentices are not covered.
Under the Payment of Gratuity Act, gratuity = (Last drawn basic + DA) × 15 × Years of service ÷ 26. So for ₹50,000 last salary and 10 years: 50,000 × 15 × 10 / 26 = ₹2,88,461. For employees not covered by the Act, the divisor is 30 instead of 26.
The tax-free gratuity ceiling is ₹20 lakh as per the 2024 amendment. Any amount paid above this is taxable in the hands of the employee.
For government employees, gratuity is fully tax-free. For private-sector employees covered under the Gratuity Act, the exemption is the least of (a) actual gratuity received, (b) ₹20 lakh, (c) 15 days salary × years of service ÷ 26. Anything above the exemption is added to taxable income.
Generally no — five years of continuous service is mandatory under the Gratuity Act. The Madras High Court has allowed payouts at four years and 240 days, but this is not a uniform national rule. Death and disablement are the only universally accepted exceptions.
Within 30 days of the gratuity becoming payable (i.e. on resignation, retirement, or termination). If delayed, the employer owes simple interest on the amount until paid.
Gratuity is a lump-sum reward an employer pays to thank an employee for long service. Under the Payment of Gratuity Act, 1972, the formula is: (Last salary × 15 × years of service) / 26. The divisor 26 represents working days in a month (excluding Sundays). For employees not covered by the Act, the divisor is 30 instead.
For private-sector employees, the tax-free portion of gratuity is the least of: actual gratuity received, ₹20 lakh, or 15 days of salary for every year of service. Anything beyond is added to taxable income and taxed at your slab rate. Government employees get full exemption.
Disclaimer:Calculations follow the Payment of Gratuity Act, 1972 and the 2024 ₹20 lakh ceiling amendment. Your employer's actual payout may vary based on contractual terms or company policy. Confirm with your HR or CA before relying on this number.
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