Gratuity Calculator

Work out the gratuity you will receive when you leave a job, using the standard 15/26 formula, with the 5-year rule and the ₹20 lakh limit built in.

Last drawn basic + DA, per month (₹)Years of serviceExtra monthsMore than six months counts as another year if your employer is covered by the Act.

My employer is covered by the Payment of Gratuity ActUsually any firm with 10 or more employees. If not, the formula uses 30 days a month.

Your gratuity

Years counted8

Pay × 15/26 × years₹2,76,923.08

Gratuity₹2,76,923

Last pay means basic plus dearness allowance. A month is taken as 26 working days.

Rates and limits are those for FY 2026-27 (tax year 2026-27 under the Income-tax Act 2025), checked on 17 October 2026: slabs as in the Union Budget 2026 (unchanged). Section numbers such as 44AD, 44ADA, 87A and 80C are the familiar Income-tax Act 1961 numbers; the 2025 Act, in force from 1 April 2026, renumbers them. Figures assume the taxpayer is under 60 (senior citizens have higher old-regime limits). The ₹20 lakh limit and the 5-year rule are the commonly quoted ones; labour-law changes may alter eligibility for some staff, so check your contract and your HR team. This is a calculator, not tax advice. Your facts may differ, so confirm anything you file with your CA.

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Frequently asked questions

What is the gratuity formula?

Last drawn monthly basic plus dearness allowance × 15 ÷ 26 × completed years of service. If your employer is not covered by the Act, the divisor is 30 instead of 26.

How are extra months counted?

For employers covered by the Act, a part year of more than six months counts as a full year, so 7 years 7 months counts as 8 and 7 years 6 months counts as 7. If your employer is not covered, only completed years count.

How many years do I need?

Normally 5 years of continuous service. A person with 4 years and 8 months is treated as having completed 5. Gratuity is paid sooner on death or disability, and contracts for fixed-term staff can differ.

Is gratuity taxable?

Within the limit (₹20 lakh) it is tax-free for most employees. Anything above is taxed as salary. Rules differ slightly for employees not covered by the Act.

Is this exact?

It is a calculator using the standard formula. Your employer's HR team applies your contract and the law, so use this to check their figure, not replace it.

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