Gratuity Calculator
Calculate your gratuity payout using the formula G = (n × b × 15) / 26 as per the Payment of Gratuity Act 1972.
Add DA if applicable
Minimum 5 years required (except death/disability)
About the Gratuity Calculator
The Gratuity Calculator computes your gratuity payout under the Payment of Gratuity Act, 1972. Any employee at a private company with EPF facilities becomes eligible after 5 continuous years of service (waived if exit is due to disability or death). Gratuity is a statutory employer-funded lump sum — a meaningful component of total compensation that most employees underestimate when negotiating CTC.
How the Gratuity Calculator works
- Enter your last drawn monthly salary — strictly basic + dearness allowance (not full CTC).
- Enter completed years of service — fractions above 6 months round up; below 6 months round down.
- The calculator applies the statutory formula G = (n × b × 15) / 26.
- For non-statutory employers, gratuity may be higher per company policy — the calculator allows custom multipliers.
Inputs explained
Formula
G = (n × b × 15) / 26 — where n = years of service, b = last drawn (basic + DA).
Worked example
An employee with 10 years of service and last drawn basic+DA of ₹50,000 receives G = (10 × 50000 × 15) / 26 ≈ ₹2,88,461. Capped at ₹20 Lakh tax-free under current law.
India-specific notes
- •Gratuity up to ₹20 Lakh is fully tax-free for non-government employees under Section 10(10).
- •Government employees receive gratuity fully tax-free without monetary cap.
- •Becomes payable on retirement, resignation (after 5 years), death or disablement.
- •Employer must pay within 30 days of becoming payable; interest accrues on delay.
Tips to maximise this calculator
- →Negotiate gratuity contributions as part of your CTC review — companies sometimes structure it separately.
- →If you change jobs before 5 years, you forfeit gratuity entirely — factor this into job-switch decisions.
- →On retirement, invest gratuity in SCSS (8.2%) or hybrid funds for steady post-retirement income.
Common mistakes to avoid
- ✕Counting full CTC instead of basic + DA — overestimates payout by 2-3×.
- ✕Switching jobs at year 4.5 — wait 6 more months to vest the full benefit.
- ✕Not nominating a beneficiary in Form F — delays disbursement if anything happens.
Glossary
- Gratuity
- A statutory lump sum paid by employers to employees after 5+ years of service.
- Basic + DA
- Basic pay plus Dearness Allowance — the components that count toward gratuity (and PF).
- POG Act 1972
- Payment of Gratuity Act — the legislation that mandates and governs gratuity in India.
- Vesting
- The 5-year minimum continuous service requirement to earn the benefit.
Frequently asked questions
Is the Gratuity Calculator free to use?
Yes. The Gratuity Calculator is free, runs in your browser and never stores personal data.
Are the assumptions India-specific?
Yes. We use INR, Indian inflation and India-specific rates (PPF, EPF, FY 2026-27 tax slabs where applicable).
Is this investment advice?
No. This tool is for education. Consult a SEBI registered advisor before investing.