Calculate your exact gratuity amount using the Payment of Gratuity Act formula. Includes tax exemption limit and both government & private employee formulas.
Minimum 5 years serviceTax-free up to ₹20 LakhAct covers 10+ employees
💰 Enter Your Details
Basic Salary + Dearness Allowance from salary slip
Minimum 5 years required (except in death/disability cases)
If 6+ months → rounds up to next year (for Act employees)
📐 Formula Used
Gratuity = (Basic+DA) × 15/26 × Years
For employees covered under Payment of Gratuity Act. Each completed year of service (6+ months rounds up).
💰
Enter your salary details
Your gratuity amount will appear here instantly
Your Gratuity Amount
₹0
Basic + DA (Monthly)
Service Period Considered
Gratuity Formula
Gross Gratuity
🏛️ Tax on Gratuity
Tax-Free Limit (2025-26)₹20,00,000
Your Gratuity
Taxable Amount
How is Gratuity Calculated in India?
Gratuity is calculated using different formulas depending on whether the employer is covered under the Payment of Gratuity Act, 1972 or not.
Three Gratuity Formulas
Employee Type
Formula
Notes
Covered by Act (Private)
(Basic+DA) × 15/26 × Years
6+ months rounds up to next year. Max ₹20L tax-free.
Not Covered by Act
(Basic+DA) × 15/30 × Years
No rounding. More conservative formula.
Government Employees
(Basic+DA) × 15/30 × Years (max ₹25L tax-free)
Higher tax exemption limit for govt employees.
Who is Eligible for Gratuity?
Any employee who has completed 5 years of continuous service with the same employer is eligible for gratuity. Exception: In case of death or disability, gratuity is payable even before 5 years.
Gratuity Tax Exemption Limit 2025-26
The tax-free gratuity limit for private sector employees is ₹20 Lakh (increased from ₹10L in recent years). Government employees enjoy a higher limit of ₹25 Lakh. Amount above the limit is taxable as per your income tax slab.
When is Gratuity Paid?
Gratuity must be paid within 30 days of becoming due. It is payable on: retirement, resignation (after 5 years), death, disability, or layoff. Your employer cannot withhold gratuity without valid legal reason.
Gratuity = (Last drawn salary × 15 × years of service) ÷ 26. Last drawn salary = Basic + DA. Example: Basic ₹50,000, 10 years service = (50,000 × 15 × 10) ÷ 26 = ₹2,88,462. Eligible after minimum 5 years of continuous service.
Is gratuity taxable?▼
Gratuity up to ₹20 lakh is completely tax-free under the Payment of Gratuity Act for government and covered employees. For private sector employees not covered by the Act, limit is ₹20 lakh. Amount above ₹20 lakh is taxable as per your income slab.
When do I get gratuity?▼
Gratuity is payable when you resign, retire, are terminated, or in case of death/disability — after completing minimum 5 years of continuous service. Must be paid within 30 days. If delayed, employer pays simple interest at 10% per annum.