Gratuity Calculator — How Much Gratuity Will You Get? (India)

Gratuity is a lump sum your employer pays you when you leave the company — provided you've completed at least 5 years of continuous service. It's one of the most significant retirement benefits for salaried employees in India, and most people have no idea how much they're entitled to until they actually resign.

The CalcHub Gratuity Calculator computes your exact gratuity amount instantly.

Gratuity Formula

For employees covered under the Payment of Gratuity Act: Gratuity = Last drawn salary × 15/26 × Years of service

Where:

• Last drawn salary = Basic salary + Dearness Allowance (DA)


• 15/26 = 15 days' salary for each year (calculated on a 26-day working month)


• Years of service = Completed years (6 months+ in the last year rounds up)

Quick Calculation Table

Basic + DA (Monthly)	5 Years	10 Years	15 Years	20 Years	25 Years
₹25,000	₹72,115	₹1,44,231	₹2,16,346	₹2,88,462	₹3,60,577
₹40,000	₹1,15,385	₹2,30,769	₹3,46,154	₹4,61,538	₹5,76,923
₹60,000	₹1,73,077	₹3,46,154	₹5,19,231	₹6,92,308	₹8,65,385
₹80,000	₹2,30,769	₹4,61,538	₹6,92,308	₹9,23,077	₹11,53,846
₹1,00,000	₹2,88,462	₹5,76,923	₹8,65,385	₹11,53,846	₹14,42,308

Worked Example

Employee details:

• Basic salary: ₹50,000/month
• DA: ₹10,000/month
• Last drawn salary = ₹60,000
• Years of service: 12 years, 8 months → rounds to 13 years (since 8 months > 6)

Gratuity = ₹60,000 × 15/26 × 13 = ₹4,50,000

Eligibility Rules

Condition	Requirement
Minimum service	5 years of continuous service
Exception	Death or disability — no minimum required
Applicable to	Every establishment with 10+ employees
Includes	Factory workers, mine workers, plantation workers, all salaried employees in qualifying establishments

Important: The 5-year rule has a judicial nuance. If you've completed 4 years and 240 days (or 190 days for seasonal establishments), some court rulings consider this as completing 5 years. However, this interpretation varies.

Gratuity Tax Exemption

Gratuity received is exempt from income tax up to certain limits:

For government employees: Entire gratuity is tax-exempt. For employees covered under the Act: Tax exemption is the least of:

1. Actual gratuity received
2. ₹20,00,000 (current maximum limit)
3. 15 days' salary × years of service (formula amount)

For employees NOT covered under the Act: Tax exemption is the least of:

1. Actual gratuity received
2. ₹20,00,000
3. Half month's salary × years of service

Any amount above the exemption limit is taxable as income in the year of receipt.

Gratuity When You Leave Before 5 Years

If you leave before completing 5 years, you are not entitled to gratuity under the Act. However:

• Some employers pay gratuity voluntarily even for shorter tenures


• Your employment contract may have different terms


• If you're terminated due to disability or death of the employee, the 5-year rule doesn't apply

Gratuity Forfeiture

An employer can forfeit gratuity (partially or fully) only if the employee is terminated for:

• Moral turpitude — criminal behavior during employment


• Riotous or violent behavior on company premises


• Any act causing damage or loss to employer property

Resignation, layoff, retrenchment, or retirement cannot be grounds for forfeiting gratuity.

How to Use the Calculator

1. Open the CalcHub Gratuity Calculator
2. Enter your basic salary + DA (monthly)
3. Enter your years of service
4. See your gratuity amount and tax exemption details

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Does gratuity include HRA, bonuses, or other allowances?

No. Gratuity is calculated only on basic salary + dearness allowance (DA). HRA, special allowances, bonuses, and overtime are excluded.

What happens to gratuity if the company shuts down?

The employer is still liable to pay gratuity. If the company can't pay, employees can file a claim with the Controlling Authority under the Payment of Gratuity Act. In insolvency proceedings, gratuity is treated as a priority payment.

Can I receive gratuity from multiple employers?

Yes. Each employer owes you gratuity independently based on your tenure with them. The ₹20 lakh tax exemption limit applies to the aggregate gratuity received from all employers in your lifetime.

Is gratuity shown in my CTC?

Many employers include gratuity as a component of CTC (Cost to Company). This means your actual take-home is reduced because the employer is setting aside 4.81% of basic+DA (15/26/12) monthly for your eventual gratuity payout.

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Related Calculators

• Salary Calculator — CTC to in-hand breakdown
• Income Tax Calculator — tax on gratuity and salary
• EPF Calculator — provident fund accumulation
• Retirement Calculator — full retirement planning