Gratuity Calculator

Estimate gratuity payable — under the Payment of Gratuity Act, 1972.

Your service

Enter your last drawn Basic + DA and length of service.

Last drawn Basic + DA (₹ / month)

₹

Years of service

Extra months

Employer type

Your estimate

Gratuity payable—

Eligible service —
Formula —
Tax-exempt portion —
Taxable portion —
Gratuity payable —

Estimate only. Covered by the Act: gratuity = (15 ÷ 26) × last drawn Basic+DA × completed years, where service of 6 months or more rounds up to a full year. Not covered: (15 ÷ 30) × Basic+DA × completed years. Minimum 5 years’ continuous service is normally required (waived on death or disablement). Statutory maximum and tax-exemption ceiling are ₹20,00,000; government gratuity is fully tax-exempt.

How it works

How gratuity is calculated in India

Gratuity is a lump sum an employer pays for long service. For employees covered by the Payment of Gratuity Act, 1972, the amount is fifteen days’ wages for every completed year of service — calculated as (15 ÷ 26) × last drawn Basic + Dearness Allowance × number of completed years. A part-year of six months or more counts as a full year. For employees not covered by the Act, a common formula uses 15 days over a 30-day month: (15 ÷ 30) × last drawn × years.

FAQ

Gratuity questions, answered

Who is eligible for gratuity?

Employees who complete at least five years of continuous service with the same employer are eligible. The five-year condition is waived if service ends due to death or disablement.

How are part-years counted?

Under the Act, a year is counted in full if you have served six months or more in that year; less than six months is ignored. So 7 years 8 months counts as 8 years, while 7 years 4 months counts as 7.

Is gratuity taxable?

For non-government employees, the exemption is the least of three amounts: the actual gratuity received, ₹20,00,000, and the amount worked out by the statutory formula. Anything beyond the exempt portion is taxable. Government employees receive gratuity fully tax-free. Consult a tax adviser for your specific case.

What if my employer isn’t covered by the Payment of Gratuity Act?

If your employer isn’t covered by the Act, gratuity is computed on a half-month (15/30) basis rather than the 15/26 formula used for covered employees. It is also often paid as an ex-gratia amount at the employer’s discretion rather than as a statutory right.

Is there a maximum gratuity amount?

Yes. ₹20,00,000 is the lifetime statutory ceiling on gratuity payable under the Payment of Gratuity Act, counted across your entire career.

What counts as ‘wages’ for gratuity?

Last drawn wages means Basic salary plus Dearness Allowance. HRA, bonuses and other allowances are excluded from the gratuity calculation.

Does Kredily track gratuity for my team?

Yes. Kredily tracks tenure, computes statutory dues and produces clean records for full-and-final settlements — free for unlimited employees on the Free Forever plan.

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