Gratuity Calculator
IndiaThe lump sum your employer pays after 5+ years — exact under the Payment of Gratuity Act, with the ₹20L tax-free ceiling applied.
Your service details
Last drawn (basic + DA)
Your basic pay only — not full CTC.
Added to basic for the gratuity formula; enter 0 if you have none.
Gratuity needs at least 5 years of continuous service.
Over 6 months rounds up to a full year.
Keeps service continuous to your last working day.
Results update live — calculations run in your browser, no signup.
₹3.46 L
Equal to 5.8 months of your salary — entirely tax-free under Sec 10(10).
100% tax-free · Sec 10(10)
₹3.46L — entirely below the ₹20L ceiling
Gratuity = 15/26 × (basic + DA) × completed years, capped tax-free at ₹20L. A planning estimate, not a final settlement.
Payable gratuity at ₹60,000 basic + DA for each completed year, with the ₹20L cap applied and any taxable excess flagged. Nothing is payable below the 5-year floor.
Payout at each milestone
5 yrs
₹1.73L
10 yrs
₹3.46L
15 yrs
₹5.19L
20 yrs
₹6.92L
| Years of service | Formula amount | Payable (after cap) | Taxable excess |
|---|---|---|---|
| 1 yrsnot eligible | ₹34,615 | ₹0 | — |
| 2 yrsnot eligible | ₹69,231 | ₹0 | — |
| 3 yrsnot eligible | ₹1.04 L | ₹0 | — |
| 4 yrsnot eligible | ₹1.38 L | ₹0 | — |
| 5 yrs | ₹1.73 L | ₹1.73 L | — |
| 6 yrs | ₹2.08 L | ₹2.08 L | — |
| 7 yrs | ₹2.42 L | ₹2.42 L | — |
| 8 yrs | ₹2.77 L | ₹2.77 L | — |
| 9 yrs | ₹3.12 L | ₹3.12 L | — |
| 10 yrs · you | ₹3.46 L | ₹3.46 L | — |
Each completed year adds ₹34,615 until the formula reaches ₹20L at about 57 years; beyond that, extra service no longer raises the tax-free amount.
Eligibility tracker
Gratuity needs 5 continuous years (waived on death or disability).
You crossed the 5-year threshold, so your gratuity of ₹3.46 L is payable on exit. Every further completed year adds ₹34,615.
Should you stay one more year?
Leave today vs after one more completed year, same salary.
Leave today · 10 yrs
₹3.46 L
payable now
Stay 1 yr · 11 yrs
₹3.81 L
payable then
+₹34,615
extra gratuity for staying one more completed year
Job switch analysis
Switching before 5 years forfeits gratuity entirely — what's at stake for you.
If you switch now
₹3.46 L
you keep it — already vested
If you wait to 5 years
₹1.73 L
vested entitlement at this salary
Already protected
₹0
gratuity is yours on exit
You're past the 5-year line, so a switch no longer costs you this gratuity — it's payable whenever you leave. Each extra year you stay still adds ₹34,615 until the ₹20L cap.
Resignation impact analysis
Resign today vs after your next appraisal (illustrative +10% pay, +1 year).
Resign today
₹3.46 L
₹60,000 · 10 yrs
After appraisal
₹4.19 L
₹66,000 · 11 yrs
+₹72,692
more gratuity if you wait for the appraisal — a higher last-drawn salary and an extra completed year both lift the payout.
The +10% appraisal is an illustrative assumption, not a forecast. Gratuity uses your final basic + DA, so the timing of your exit around a raise and a year boundary matters.
Exempt up to ₹20 lakh across your career — here is where you stand.
Government employees receive gratuity fully tax-free. The ₹20L cap is a lifetime limit across all employers for non-government employees. Tax rules can change — treat as an estimate, not advice.
Salary growth impact
A higher last-drawn salary lifts gratuity proportionally — same 10 years.
| Last drawn (basic + DA) | Gratuity payable | Tax status |
|---|---|---|
| ₹60,000 | ₹3.46 L | tax-free |
| ₹66,000+10% | ₹3.81 L | tax-free |
| ₹72,000+20% | ₹4.15 L | tax-free |
| ₹78,000+30% | ₹4.50 L | tax-free |
Salary-growth rows are illustrative uplifts on your current pay, not a guaranteed appraisal. Highlighted row is your current salary.
- Gratuity payable: ₹3.46 L
- Each year of service: ₹34,615
- Replaces about 5.8 months of salary
What this means
For 10 years at ₹60,000 basic + DA, the Act entitles you to ₹3.46 L. The whole amount is tax-free under Sec 10(10), with ₹16.54 L of ceiling still to spare. It replaces roughly 5.8 months of your pay — a meaningful cushion to redeploy rather than spend.
Every ₹100 of your gratuity — illustrative split of the formula
Key takeaways
- Gratuity payable: ₹3.46 L
- Each year of service: ₹34,615
- Formula amount: ₹3.46 L (15/26 × pay × 10 yrs)
- Tax-free headroom: ₹16.54 L left (Sec 10(10))
- Replaces about 5.8 months of salary
Combined retirement view
Your gratuity alongside the EPF and NPS you're building.
Total retirement pot
₹43.46 L
Pull this from the EPF calculator.
Pull this from the NPS calculator.
Gratuity is 8% of your ₹43.46 L pot — EPF and NPS figures are your own estimates for context.
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Your gratuity of about ₹3.46 L after 10 yrs can anchor a retirement corpus.
Plan the rest of your money life
Put this payout in context — your in-hand salary, EPF, NPS and full retirement corpus.
Gratuity = (15 ÷ 26) × last drawn monthly salary (basic + DA) × completed years of service, with the ₹20 lakh Section 10(10) exemption applied. Your actual payout depends on how your employer defines salary and whether you fall under the Act, and tax rules can change — treat these figures as a close planning estimate, not advice or a final settlement.
How gratuity is calculated
G = (15 ÷ 26) × (basic + DA) × completed years [capped at ₹20L]
- G
- gratuity payable (before the ₹20L tax-free cap)
- 15 ÷ 26
- 15 days' wages out of a 26-day working month
- basic + DA
- last drawn monthly basic + dearness allowance
- completed years
- full years served; a part-year over 6 months rounds up
Worked example
With your inputs — ₹60,000/month basic + DA over 10y 0m: that's 10 completed years, and each year earns 15 ÷ 26 × ₹60,000 = ₹34,615. So the formula gives ₹34,615 × 10 = ₹3.46 L, entirely below the ₹20L ceiling — a tax-free gratuity of about ₹3.46 L. A planning estimate before tax, not a final settlement.
Most asked gratuity questions
Under the Payment of Gratuity Act, gratuity = (15 ÷ 26) × last drawn monthly salary (basic + DA) × completed years of service. The 15 represents 15 days' wages and the 26 is the number of working days assumed in a month.
Yes — a minimum of 5 years of continuous service with the same employer is required, except where service ends due to death or disability, in which case the 5-year rule is waived.
For non-government employees, gratuity is tax-free up to ₹20 lakh in total across your career under Section 10(10). Anything above that ceiling is added to your income and taxed at your slab rate. Government employees receive gratuity fully tax-free.
Gratuity becomes payable when you leave after qualifying service — on resignation, retirement, superannuation, death, or disability. The employer must pay it within 30 days of it becoming due.
The Act counts completed years; a part-year of more than six months generally rounds up to a full year for the calculation, while six months or less is dropped. So the timing of your exit can be worth a whole extra year of gratuity.
Serving (or being paid for) your notice period keeps your service continuous up to your last working day, which is the date used to count completed years. Leaving abruptly can shorten the service counted and, near a year boundary, cost you a full year of gratuity.
The complete guide to gratuity
What gratuity is and why it exists
Gratuity is a one-time payment your employer makes to thank you for long service, governed by the Payment of Gratuity Act, 1972. It rewards loyalty: the longer you stay, the larger the lump sum you receive when you eventually leave. It applies to establishments with ten or more employees and becomes payable on resignation, retirement, superannuation, death or disability — provided you have completed the qualifying service.
How gratuity is calculated
The statutory formula is (15 ÷ 26) × last drawn monthly salary (basic + dearness allowance) × completed years of service. The 15 stands for 15 days' wages earned for every year, and the 26 is the number of working days assumed in a month. For ₹60,000 basic + DA over 10 years, that works out to ₹3.46 L before any cap — roughly ₹34,615 for each completed year. Note it uses basic plus DA, not your full CTC, so the figure is usually lower than people expect.
The ₹20 lakh tax-free ceiling (Sec 10(10))
For non-government employees, gratuity is tax-free up to a lifetime ceiling of ₹20,00,000 across your whole career under Section 10(10). Anything beyond that is added to your income and taxed at your slab rate. Your payout is below the ceiling, so the full ₹3.46 L reaches you tax-free. Government employees receive gratuity entirely tax-free. Tax rules change from time to time, so treat the tax figures here as estimates rather than advice.
Why every extra year matters
Because the formula multiplies by completed years, each additional year adds another 15/26 of a month's basic + DA — here, ₹34,615 a year. That sensitivity is exactly why the years-of-service slider moves the number so sharply, and why the gratuity curve flattens once it meets the ₹20L ceiling: beyond that point, extra service no longer raises the tax-free amount. A part-year of more than six months generally rounds up to a full year, so the timing of your exit — and serving your notice period — can be worth a whole extra year of gratuity.
The five-year rule and switching jobs
You need at least five years of continuous service with the same employer to qualify, except where service ends due to death or disability. That makes the five-year mark a genuine financial milestone: leaving even a few months before it forfeits the entire entitlement and restarts the clock at your next employer. If you are close, the job-switch and stay-one-more-year views above show exactly what staying buys you.
How to use this calculator
Enter your last drawn basic and DA, your years and extra months of service, and your notice period to see the gratuity payable, how much is tax-free, and any taxable excess above ₹20 lakh. Use the scenario chips, the salary-growth table and the stay-one-more-year view to test how a raise, a later exit or hitting five years changes the payout. Your actual settlement depends on how your employer defines salary and whether you are covered by the Act, so confirm the exact terms with your HR or payroll team before relying on a figure — these are planning estimates, not a final quote or tax advice.