Our free gratuity calculator works out your payout in seconds. Enter your last drawn salary and years of continuous service, and it applies the 15/26 formula, rounds your service the way the law does, and applies the ₹20 lakh ceiling for Indian rupee results. No sign-up is needed and nothing you type leaves your browser.

What Is Gratuity?

Gratuity is a one-time payment an employer makes to an employee as a thank-you for long, continuous service. In India it was governed by the Payment of Gratuity Act, 1972, and since 21 November 2025 it falls under the Code on Social Security, 2020, one of the four new labour codes. It is paid when you resign, retire, are laid off, or in case of death or disablement.

Gratuity is fully funded by the employer. It is not deducted from your salary, although many companies show it as part of your cost to company (CTC). You can read the official text of the labour codes on the Ministry of Labour and Employment website.

Gratuity Calculator Formula

Years of service are rounded to the nearest whole year. If the extra part is six months or more, it counts as a full year, so 7 years and 7 months becomes 8 years. Less than six months is dropped, so 7 years and 4 months becomes 7 years. This gratuity calculator applies that rule automatically.

Gratuity Eligibility Rules in 2026

Under the new labour codes, wages for gratuity must be at least 50% of your total pay. If allowances are more than half of your CTC, the extra is added back to wages, which can raise your gratuity.

How to Use the Gratuity Calculator

The tool sits at the top of this page. Follow these five steps to get your estimate.

Step 1: Select Your Country or Currency

Pick your currency from the Country / Currency menu. Choose India (INR) if you want the ₹20 lakh statutory cap applied to the result.

Step 2: Enter Your Last Drawn Monthly Salary

Type your monthly basic salary plus dearness allowance. Do not include HRA, bonus or other allowances. In our example we enter ₹50,000.

Step 3: Enter Your Years of Service

Enter the years of continuous service with the same employer. You can use decimals, such as 7.5 for seven and a half years. We enter 10 years.

Step 4: Click Calculate Gratuity Amount

Press the Calculate Gratuity Amount button. The gratuity calculator rounds your service, applies the 15/26 formula and checks the cap.

Step 5: Read Your Gratuity Result

The result card shows your estimated gratuity, the rounded years used, your base salary and your eligibility status. Here the payout is about ₹2,88,462.

Gratuity Calculation Example

Priya earns a basic salary plus DA of ₹50,000 a month and leaves her job after 10 years and 2 months.

1. Service is rounded down to 10 years, because 2 months is less than six.
2. 15 × ₹50,000 × 10 = ₹75,00,000.
3. ₹75,00,000 ÷ 26 = ₹2,88,461.54.
4. This is below ₹20 lakh, so Priya receives about ₹2,88,462.

Gratuity Amounts at Common Salaries

Is Gratuity Taxable?

For private-sector employees, gratuity is tax-free up to ₹20 lakh under Section 10(10) of the Income Tax Act. Any amount above that is taxed at your slab rate. For central and state government employees, the full gratuity is tax-free. Check the latest rules with a tax adviser before you file.

Tips to Get the Most From Your Gratuity

• Check how your employer defines wages. Under the new codes, wages must be at least 50% of total pay.
• Time your exit. Leaving after 4 years and 6 months can count as 5 years, which may make you eligible.
• Keep your nomination form up to date so your family can claim quickly.
• Plan where the lump sum goes. Use our FD calculator or SIP calculator to compare options, and our retirement calculator to see if you are on track.

Who Should Use a Gratuity Calculator?

A gratuity calculator helps anyone planning a job change, retirement or salary negotiation. Employees use it to check their exit payout. HR teams use it to estimate liabilities. Fixed-term staff can use it to see what they will earn after just one year under the 2026 rules.

Frequently Asked Questions