Gratuity Calculator — Payment of Gratuity Act 1972, Updated 2025-26
Calculate gratuity amount as per the Payment of Gratuity Act 1972 — for government, private (covered) and private (not covered) employees. Tax exemption up to ₹20 lakhs. Updated for 2025-26.
Last updated: June 2026
Employee type
Do NOT include HRA, allowances or incentives.
Years of service
Years
Months
6-month rule: 5 years 7 months = 6 years; 5 years 4 months = 5 years.
✅ Eligible for gratuity
In case of death or disability, the 5-year rule is waived.
Your gratuity
- Gratuity amount
- —
- Tax-exempt amount
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- Taxable amount
- —
- Years considered (after rounding)
- —
—
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Gratuity tax exemption
- ✓ Government employees: fully exempt
- ✓ Private (covered): exempt up to ₹20 lakh
- ✓ Private (not covered): exempt up to ₹20 lakh
Maximum tax-free gratuity: ₹20,00,000 (₹20 lakh).
📘 Worked example
Basic + DA = ₹50,000/month, 7 years' service (covered):
(50,000 × 15 × 7) ÷ 26 = ₹2,01,923
Fully tax-free (under the ₹20 lakh limit).
📐 The gratuity formula
Government & Private (covered)
(Basic+DA × 15 × Years) ÷ 26
15 days' salary per year of service; 26 = working days in a month.
Private (NOT covered)
(Basic+DA × 15 × Years) ÷ 30
30 used instead of 26.
📋 Gratuity rules
- → Payable on retirement, resignation (after 5 years), death or disablement.
- → Must be paid within 30 days of becoming due.
- → The employer can choose to pay more than the formula amount.
- → Forfeiture: if terminated for misconduct causing damage or loss.
- → A nominee can claim the gratuity in case of death.
- → The 5-year rule is waived on death or permanent disability.
A free gratuity calculator built on the Gratuity Act 1972.
Gratuity is a lump-sum reward your employer pays for long service, governed in India by the Payment of Gratuity Act 1972. This gratuity calculator works out exactly how much you're owed based on your last drawn Basic and DA, your years of service, and whether you're a government employee, a private employee covered by the Act, or a private employee in an organisation that isn't covered. It applies the statutory formula and the 6-month rounding rule for you, and shows the tax-free and taxable portions separately.
For covered and government employees, the formula is your last drawn Basic + DA multiplied by 15, multiplied by your years of service, divided by 26. The 15 represents fifteen days of salary for each completed year, and 26 is treated as the number of working days in a month. For employees not covered by the Act, the only change is that the divisor becomes 30 instead of 26, which produces a slightly smaller figure. Crucially, only Basic salary and Dearness Allowance count — HRA and other allowances are excluded.
Eligibility, rounding, and the ₹20 lakh limit
You qualify for gratuity after five continuous years with the same employer, and this tool tells you instantly whether you're eligible or how much longer you need to work. The 6-month rounding rule means a part-year above six months is counted as a full year, so 5 years and 7 months becomes 6 years, while 5 years and 4 months stays at 5. The calculator shows the rounded "years considered" so the maths is fully transparent.
Tax treatment depends on your category. Government employees pay no tax on gratuity at all. Private employees — covered or not — enjoy a lifetime tax exemption of up to ₹20 lakh, and only the amount above that ceiling is taxable. Remember that the five-year condition is waived entirely in the case of death or permanent disability. Everything runs in your browser with nothing uploaded, so you can model different salaries and tenures privately.
Legal Disclaimer: This calculator uses the standard Payment of Gratuity Act 1972 formula for informational purposes only and is not legal or tax advice. Special cases, contractual terms, and recent amendments may apply. Consult your HR department or a legal professional for your specific situation.
How it works
Three quick steps — no account, nothing uploaded to a server.
Pick your employee type
Choose government, private covered, or private not covered — this sets the right formula.
Enter salary and tenure
Type your last drawn Basic + DA and your years and months of service.
See your gratuity & tax
Get your gratuity amount, the rounded years used, and the tax-free and taxable portions instantly.
Rates and rules on this page are verified against EPFO (epfindia.gov.in). Last checked July 2026.
FAQ
Frequently asked questions
How is gratuity calculated in India?
For employees covered by the Payment of Gratuity Act 1972, gratuity is calculated as (last drawn Basic + DA × 15 × years of service) ÷ 26, where 15 represents 15 days of salary for each completed year and 26 is the number of working days in a month. For employees not covered by the Act, the same formula is used but divided by 30 instead of 26. Only Basic salary and Dearness Allowance are counted — HRA, bonuses, and other allowances are excluded.
Who is eligible for gratuity?
You become eligible for gratuity after completing five continuous years of service with the same employer. Gratuity is payable on retirement, resignation, superannuation, death, or disablement. The five-year rule is waived in the case of death or permanent disability, where gratuity is paid regardless of how long the employee worked. An organisation is covered by the Gratuity Act if it has had 10 or more employees on any day in the preceding 12 months, which means most companies qualify.
How does the 6-month rounding rule work?
Under the Gratuity Act, any part of a year beyond your completed years counts as a full year if it exceeds six months, and is ignored if it is six months or less. So 5 years and 7 months is treated as 6 years for the calculation, while 5 years and 4 months is treated as 5 years. This calculator applies the rule automatically and shows you the rounded 'years considered' figure it uses, so you can see exactly how your tenure was counted.
Is gratuity taxable?
For government employees, gratuity is fully exempt from income tax. For private-sector employees — whether or not the company is covered by the Gratuity Act — gratuity is tax-free up to a maximum of ₹20 lakh in a lifetime; any amount above ₹20 lakh is added to your taxable income. This calculator shows your gratuity amount, the tax-exempt portion, and any taxable balance separately so you know exactly where you stand.
What salary is used for the gratuity calculation?
Gratuity is based on your last drawn monthly salary, but only the Basic salary plus Dearness Allowance (DA) is counted. You should not include House Rent Allowance (HRA), conveyance, special allowances, bonuses, overtime, or incentives. Using your full CTC or gross salary will significantly overstate the gratuity, so enter only Basic + DA in the salary field for an accurate result.
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