Gratuity from your last basic pay and years of service, with the tax-free part
Estimates only, not financial advice. What you type stays on your device. Checked against sources on 23 Oct 2026, except the two ₹20 lakh ceilings (the Labour Ministry notification of 29 Mar 2018 and CBDT notification 16/2019), whose official copies could not be opened that day.Gratuity becomes payable after 5 years with one employer, and comes to 15 days of pay for every year served, worked out as 15 divided by 26 of your last basic. The tax-free portion is shown separately. Estimates only, and not advice.
Rates and rules read from the sources listed on this page (the earliest on 23 Oct 2026); they may have changed since. Not covered by that date: the two ₹20 lakh ceilings (the Labour Ministry notification of 29 Mar 2018 and CBDT notification 16/2019), whose official copies could not be opened that day.
Set Last drawn basic pay + DA, or pick a salary chip.
Enter your Years and Months of service.
Answer whether your employer is covered by the gratuity law (10 or more employees).
Read the Gratuity, the tax-free and taxable parts and the working, then press Share result.
The gratuity calculator works out the lump sum an employer pays when you leave after long service. Enter your last drawn monthly basic pay plus dearness allowance and your years and months of service. You get the gratuity, the years the formula counted, and how much of it is free of income tax for a non-government employee.
For an employer covered by the Payment of Gratuity Act, 1972 (10 or more employees), the formula is 15 days of wages for every year of service, with a month counted as 26 working days: gratuity = (monthly basic + DA) × 15 ÷ 26 × years. A part year of more than six months counts as a full year. ₹50,000 a month for 10 years gives ₹2,88,462; 10 years and 7 months counts as 11 years and gives ₹3,17,308.
For an employer not covered by the Act, the income tax rule uses half a month's average salary of the last 10 months for every completed year: gratuity = (average basic + DA) × 15 ÷ 30 × completed years, and part years are ignored.
Gratuity is normally payable after 5 years of continuous service, or earlier on death or disablement. The most an employer must pay under the Act is ₹20 lakh, and ₹20 lakh is also the lifetime tax-free limit for non-government employees. These amounts are shown with the date they took effect.
The Code on Social Security, 2020 replaces the 1972 Act and is reported in force from 21 November 2025. It keeps the formula but changes what counts as wages and lets fixed-term employees qualify after one year, and the Income-tax Act, 2025 applies from 1 April 2026. Confirm the current rules with your employer before relying on the figure. Estimates only, not financial advice.
This is the Indian rule. Working in the UAE private sector? End-of-service gratuity there follows the 2021 UAE Labour Law (21 and 30 days of basic pay a year): use the UAE Gratuity Calculator.
Sources: the Payment of Gratuity Act, 1972 and the Code on Social Security, 2020 (Ministry of Labour and Employment); the Ministry's notification of 29 March 2018 on the ₹20 lakh ceiling; CBDT notification 16/2019 on the tax-free limit.
For an employer covered by the gratuity law: (last drawn monthly basic pay + DA) × 15 ÷ 26 × years of service, where a part year of more than six months counts as a full year. ₹50,000 a month for 10 years gives about ₹2,88,462. Employers not covered use 15 ÷ 30 and completed years only.
Gratuity is normally payable only after 5 years of continuous service, except on death or disablement, and courts have differed on cases just short of 5 years. Under the Code on Social Security, 2020, fixed-term employees qualify after one year. Check with your employer; the calculator flags service under 5 years.
The gratuity law counts 26 working days in a month, leaving out four weekly days off. So 15 days of wages is 15 ÷ 26 of a monthly salary. For employers not covered by the law, the income tax rule uses 30 days instead, which gives a smaller figure.
For non-government employees, gratuity up to ₹20 lakh over your working life is free of income tax; anything above that is taxed as salary. Government employees' gratuity is fully exempt. The Income-tax Act, 2025 applies from 1 April 2026, so confirm the current rule for your tax year.
Under the gratuity law an employer must pay at most ₹20 lakh, the ceiling in force since 29 March 2018. An employer may pay more by policy, but the part above the tax-free limit is taxable. The calculator shows when your figure is above the ceiling.
Your last drawn monthly basic pay plus dearness allowance; HRA, bonus and other allowances are left out. Under the Code on Social Security, 2020, if allowances are more than half of your total pay, the excess counts as wages, which can raise the figure.
Rates and rules change; check the source before you rely on a figure.
Still stuck? Ask about Gratuity Calculator and anybody who knows can answer. No account needed.
Also works as: Gratuity Calculator India.
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