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Gratuity Calculator

Calculate the gratuity amount payable by your employer on resignation/retirement.

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Gratuity Calculator
Calculate the gratuity amount payable by your employer on resignation/retirement.
Last drawn monthly salary (₹)
Years of service
Organisation type
Monthly salary
₹50.0K
Years of service
10 years
Gratuity payable
₹2.88 L
Tax-free limit
₹2.88 L
Formula used
(S×15×Y)/26
Invest your gratuity →

For illustration only. Subject to market risks. Not investment advice.

⚠️ Disclaimer: Results are for illustration only. Mutual Fund investments subject to market risks. Assumed returns may not reflect actual performance. Read all scheme-related documents carefully. Not investment advice.
About this calculator

Gratuity Calculator — explained

The Gratuity Calculator computes the gratuity amount payable to a salaried employee on resignation, retirement, or death after 5 or more years of continuous service. Gratuity is governed by the Payment of Gratuity Act, 1972, and is tax-free up to ₹20 lakhs cumulative across all employers in your lifetime. This India-specific gratuity calculator handles both employees covered under the Act (most private companies with 10+ employees) and those not covered, and shows the exact formula used so you can verify the calculation against your HR's number.

Knowing your gratuity before resignation or retirement helps you negotiate exit timing, plan reinvestment of the lumpsum (often ₹5–20 lakhs for mid-career employees), and avoid surprises. Backed by AMFI Registered MFD Nithin Finserv, ARN: 307760.

What is the Gratuity Calculator?

Gratuity is a one-time lumpsum payment by an employer to an employee on completion of 5 or more years of continuous service, on resignation, retirement, death, or disablement. It's a statutory benefit under the Payment of Gratuity Act, 1972, applicable to establishments with 10 or more employees. The amount is based on the employee's last drawn salary (basic + DA) and years of service. Up to ₹20 lakhs cumulative across employers is tax-free in your lifetime.

How it works — the formula

Covered under the Gratuity Act: Gratuity = (Last drawn monthly salary × 15 × Years of service) / 26 — the 26 reflects 26 working days per month. Not covered: Gratuity = (Last drawn salary × 15 × Years of service) / 30 — 30 calendar days per month. 'Salary' here means basic + DA only (not full CTC). Service years rounded up if the final year crosses 6 months.

How to use this calculator

  1. 1Enter your last drawn monthly salary (basic + DA, not full CTC)
  2. 2Enter total completed years of continuous service
  3. 3Choose whether your employer is covered under the Gratuity Act
  4. 4Read the gratuity payable and the tax-free portion
  5. 5Plan reinvestment of the lumpsum — equity SIPs, FDs, or balanced funds

Key features

  • ✓Act-covered and non-covered formula support
  • ✓Salary-and-tenure-based instant calculation
  • ✓Tax-free limit awareness (₹20L lifetime)
  • ✓Compliant with Payment of Gratuity Act 1972
  • ✓Free, mobile-friendly, no signup

Frequently asked questions

Is gratuity taxable in India?
Tax-free up to ₹20 lakhs cumulative across all employers in your lifetime. Anything above ₹20L is taxed at your slab rate. For government employees, the entire gratuity is fully tax-free without any limit.
What if I leave my job before 5 years?
Generally no gratuity is payable. Exception: in case of death or disablement during service, the 5-year minimum is waived and the family/employee receives gratuity proportionate to years served.
Does part-year service count?
Yes, but only if you've served more than 6 months in the final year — that gets rounded up to a full year. Under 6 months in the final year, it's ignored. Example: 4 years 7 months = 5 years for gratuity calculation.
How can I check if my employer is covered under the Gratuity Act?
The Act applies to establishments with 10+ employees (current or at any time in the past 12 months). Most private companies, factories, mines, plantations, and ports are covered. If unsure, ask HR or check your offer letter / employee handbook.
Where should I invest my gratuity lumpsum?
Depends on age and existing portfolio. Near retirement: split between debt mutual funds, Senior Citizen Savings Scheme, and balanced advantage funds. Mid-career: equity mutual fund SIP-on-lumpsum for long-horizon growth. Consult an AMFI Registered MFD for personalised allocation.
When is gratuity paid out?
Within 30 days from the date it becomes payable (i.e., last working day). If the employer delays, simple interest at govt-notified rate is payable on the delayed amount.
Does gratuity include bonus or commissions?
No. Gratuity is computed only on basic + DA, not on bonus, commissions, HRA, or other allowances. This is why salary structuring with high basic boosts gratuity entitlement.
Can the company refuse to pay gratuity?
Only in specific circumstances — termination for misconduct involving moral turpitude, riotous conduct, or financial loss to the company (and even then, only the portion proportionate to the loss can be withheld). Most disputes go to the Labour Commissioner for resolution.
What if I die during service?
Gratuity is paid to the nominee or legal heirs even if 5 years aren't completed. The amount is calculated on the same formula, with the years of completed service used as-is.
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