Gratuity Calculator (India)

Compute gratuity entitlement using the statutory 15/26 formula, service rounding rules, and Section 10(10) ₹20 Lakh tax-exemption split.

Estimated Total Gratuity
₹4,41,346.15
Calculated for 9 rounded years using 15/26 formula
Tax-Exempt Gratuity (Sec 10(10)) ₹4,41,346.15
Taxable Portion (Exceeding ₹20L) ₹0.00
Effective Service Years Used 9 years
Formula Denominator 15 / 26 days
Inputs
₹ / mo
Basic Pay plus Dearness Allowance (excludes HRA and bonuses).
years
Full years worked with the employer (5+ years required for routine eligibility).
months
For covered establishments, >6 months rounds up to the next full year.
Establishments with 10+ employees are covered under the Act.
Results & Graph
Estimated Total Gratuity
₹4,41,346.15
Calculated for 9 rounded years using 15/26 formula
Tax-Exempt Gratuity (Sec 10(10))
₹4,41,346.15
Up to ₹20,00,000 statutory cap
Taxable Portion (Exceeding ₹20L)
₹0.00
Effective Service Years Used
9 years
Formula Denominator
15 / 26 days

Tax-Exempt vs. Taxable Gratuity Split

Comparison against the ₹20,00,000 Section 10(10) exemption ceiling
Graph 1 • Tax-Exempt vs. Taxable Gratuity Split Comparison against the ₹20,00,000 Section 10(10) exemption ceiling
Tax-Exempt Gratuity: 441,346 INRTaxable Excess Above ₹20L: 0 INR Tax-Exempt Gratuity 441,346 INR Taxable Excess Above ₹20L 0 INR
Graph 2 • Proportional Share Ring Net vs. tax/interest share
TOTAL 441.3k Tax-Exempt Gratuity 441.3k (100.0%)
Graph 3 • Projected Payout / Corpus Across Service & Tenure Horizons Statutory benchmark comparison across brackets or years
0 863.9k 1.73M 5 Yrs: 319,976 320.0k 5 Yrs 10 Yrs: 639,952 640.0k 10 Yrs 15 Yrs: 959,928 959.9k 15 Yrs 20 Yrs: 1,279,903 1.28M 20 Yrs 25 Yrs: 1,599,879 1.60M 25 Yrs
Summary: Total gratuity is ₹4,41,346.15, of which ₹4,41,346.15 is tax-exempt and ₹0.00 is taxable.
Summary: With a last drawn Basic + DA salary of ₹85,000.00/month and 8 years, 7 months of service (9 effective years under the covered 15/26 rule), your calculated gratuity is ₹4,41,346.15. Up to ₹4,41,346.15 is tax-exempt under the ₹20,00,000 statutory limit.
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Formula & Mathematical Methodology: Payment of Gratuity Act, 1972 Section 4(2) Formula

Gratuitycovered = (Basic + DA) × 1526 × Y,   Gratuityuncovered = (Basic + DA) × 1530 × Y
Covered: Gratuity = (Basic + DA) × (15 / 26) × RoundedYears; Uncovered: Gratuity = (Basic + DA) × (15 / 30) × CompletedYears
  • Basic + DA: Last drawn monthly Basic Salary plus Dearness Allowance
  • 15 / 26: 15 days of wages out of 26 working days in a month

Rounding: Service tenure > 6 months in the final year rounds up to the next integer year for covered establishments.

Worked Example: ₹85,000 Basic+DA with 8 Years, 7 Months Service (Covered Establishment)

An employee leaves a covered company after 8 years and 7 months with a last drawn Basic + DA of ₹85,000.

  1. Because 7 months exceeds 6 months, tenure rounds up from 8 to 9 effective years.
  2. Gratuity = ₹85,000 × 15 × 9 ÷ 26 = ₹4,41,346.15.
  3. Since ₹4,41,346.15 is below the ₹20,00,000 ceiling, 100% is tax-exempt.
Result: Total gratuity is ₹4,41,346.15 (100% tax-exempt under Section 10(10)).

Frequently Asked Questions

Does the 5-year minimum service rule apply if an employee passes away or becomes disabled?

No. Under Section 4(1) of the Payment of Gratuity Act, the 5-year continuous service requirement is waived in the event of death or disablement.

Finance & Investing · India Payroll & Retirement Benefits

Gratuity Calculator (India): inputs, method, and how to read the result

Compute gratuity entitlement using the statutory 15/26 formula, service rounding rules, and Section 10(10) ₹20 Lakh tax-exemption split.

Choose inputs for the case you are checking

The defaults are illustrative. Replace them with values for your case and keep the units shown beside each field.

  • Last Drawn Monthly Salary (Basic + DA): Basic Pay plus Dearness Allowance (excludes HRA and bonuses).
  • Completed Full Years of Service: Full years worked with the employer (5+ years required for routine eligibility).
  • Additional Months in Final Year: For covered establishments, >6 months rounds up to the next full year.
  • Establishment Coverage Status: Establishments with 10+ employees are covered under the Act.

What the calculation includes

With the default values shown, Estimated Total Gratuity is ₹4,41,346.15. The calculation follows Payment of Gratuity Act, 1972 Section 4(2) Formula; the formula and variable definitions above show how the inputs combine.

One-input check: With the other defaults held constant, changing Last Drawn Monthly Salary (Basic + DA) from 85,000 ₹ / mo to 93,500 ₹ / mo changes Estimated Total Gratuity from ₹4,41,346.15 to ₹4,85,480.77. This is a comparison inside the calculator's stated model, not a prediction.

Where to use caution

  • Applies the current ₹20,00,000 lifetime tax-exempt ceiling under Section 10(10) of the Income Tax Act for non-government employees.
  • Employers may voluntarily pay higher gratuity under internal policy, though tax exemption remains capped at the statutory formula and ₹20L limit.

Scope: India (Payment of Gratuity Act, 1972) Check the assumptions and limitations against your situation before relying on the estimate.

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