Gratuity Calculator
Calculate your gratuity amount based on your last drawn salary and years of service
Calculate Your Gratuity
About Gratuity Calculation
Calculation Formula
Gratuity = (Last drawn salary × Years of service × 15) / 26
Eligibility
Minimum 5 years of continuous service
Salary Component
Basic salary + Dearness Allowance
Maximum Limit
₹20 lakhs statutory limit
Example Calculation
If your last drawn salary is ₹50,000 and you have completed 10 years of service:
Gratuity = (50,000 × 10 × 15) / 26
Gratuity = (75,00,000) / 26
Gratuity = ₹2,88,461.54
Quick Information
₹20 Lakhs
Maximum gratuity limit as per current law
5 Years
Minimum service required for eligibility
15 Days Wage
Per year of completed service
Tax Exempt
Up to specified limits
Important Notes
- Gratuity is payable on retirement, resignation, or superannuation
- In case of death, gratuity is payable to nominee regardless of service period
- Service period includes full years and completed months
- Formula applies to establishments covered under Gratuity Act
Frequently Asked Questions
Gratuity is calculated based on the last drawn salary and the number of years of service. The formula typically used is: (Last Drawn Salary × 15/26) × Number of Years of Service. This calculation may vary depending on the applicable gratuity laws and company policies.
The minimum service period to be eligible for gratuity is typically 5 years. However, this may vary depending on the specific gratuity laws applicable in your region or company policies. It's important to check the relevant regulations to understand the exact requirements.
Gratuity is taxable under certain conditions as per the Income Tax Act. Generally, gratuity received by government employees is fully exempt from tax. For non-government employees, gratuity up to a specified limit is exempt, and any amount exceeding that limit is taxable. It's advisable to consult the latest tax regulations or a tax professional for accurate information.
The maximum gratuity limit is determined by the government and may be revised periodically. As of now, the maximum limit for gratuity payment under the Payment of Gratuity Act is ₹20 lakhs. This means that even if the calculated gratuity amount exceeds this limit, the payable gratuity will be capped at ₹20 lakhs.