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BBI

🤝 Gratuity Calculator

A gratuity calculator computes your statutory gratuity entitlement based on your last drawn salary and years of service. Gratuity = (Last salary × 15 × Service years) ÷ 26, subject to a maximum of ₹20 lakh. You must have completed 5+ years of continuous service to be eligible.

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Gratuity details

Gratuity payable after 10 years of service

₹2,88,461.54

Formula: last drawn salary × 15 × years of service ÷ 26 (capped at ₹20,00,000.00)

Service of more than 6 months in the final year is rounded up to a full year under the Payment of Gratuity Act, 1972. Gratuity up to ₹20,00,000.00 is tax-exempt for private-sector employees.

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Frequently asked questions

How is gratuity calculated in India?
Gratuity = (Last drawn monthly salary × 15 × Years of service) ÷ 26. The 15-day factor represents half a month's salary per year of service. The divisor 26 accounts for working days in a month.
What is the minimum service for gratuity eligibility?
Under the Payment of Gratuity Act 1972, an employee must complete at least 5 years of continuous service to be eligible. Service of 6+ months in the final year counts as a full year.
What is the maximum gratuity limit?
The maximum gratuity payable under the Payment of Gratuity Act is ₹20 lakh (₹20,00,000). Some companies pay more as ex-gratia, but only ₹20 lakh is tax-exempt under Income Tax rules.
Is gratuity taxable?
Gratuity received from a covered employer (10+ employees) is tax-exempt up to ₹20 lakh. Government employees' gratuity is fully exempt. Any amount above ₹20 lakh is taxable as salary income.

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Disclaimer: This calculator is for informational and educational purposes only. Results are estimates and not financial advice. Consult a licensed financial advisor before making financial decisions.