Gratuity payable after 5 years' service. The Gratuity Calculator takes last drawn monthly basic + dearness allowance, years of service and returns gratuity payable plus eligibility, tax-free portion, years counted (rounded). Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
Payroll figures should follow the rules in your contracts and local law. Where a rule differs between states or countries, adjust the inputs; the calculator shows its assumptions so you can check them against your own policy. Use the worked example below to check the maths against your own figures.
How the Gratuity Calculator works
Under the Payment of Gratuity Act an employee who completes five years receives 15 days' wages for every year of service, with a service period of six months or more rounding up to a full year. Gratuity up to ₹20 lakh is tax-free for private-sector employees.
Worked example
With the example values (last drawn monthly basic + dearness allowance of ₹50,000, years of service of 7), the gratuity payable is ₹201,923.08; eligibility Eligible (5 or more years of service), tax-free portion ₹201,923.08, years counted (rounded) 7. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
Assumptions and limits: Formula for establishments covered by the Payment of Gratuity Act; the tax-free limit is ₹20 lakh. Some employers pay more under their own policy.
Related Calculators
Frequently Asked Questions
How is gratuity payable calculated?
gratuity = 15 ÷ 26 × last drawn salary × completed years of service.
Which figures do I need?
Last drawn monthly basic + dearness allowance, years of service. Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
Do the rules differ by location?
Yes. Statutory rates, ceilings and eligibility conditions vary by country and often by state. Adjust the inputs to your jurisdiction and confirm with your payroll provider or labour law adviser.
What assumptions does this calculator make?
Formula for establishments covered by the Payment of Gratuity Act; the tax-free limit is ₹20 lakh. Some employers pay more under their own policy.
