Gratuity Calculator
Gratuity payable on leaving a job, using the Payment of Gratuity Act formula, with the ₹20 lakh tax-free limit.
How to use the Gratuity calculator
- Enter last drawn monthly basic + DA, completed years of service, extra months and employer covered under the Gratuity Act?.
- Read the gratuity at the top of the result, with service years counted, tax-free portion, taxable portion underneath. It updates as you type.
- Change one input at a time to see what moves the answer most, then save the result with Copy link or Download PDF.
About this tool
Under the Act, a part-year of more than six months counts as a full year. For employers outside the Act only completed years count, and the divisor is 30.
Formula: Covered: last salary × 15 × years ÷ 26. Not covered: last salary × 15 × years ÷ 30
Worked example
With last drawn monthly basic + da of ₹60,000, completed years of service of 8 years, extra months of 7 and employer covered under the gratuity act? of Yes:
| Gratuity | ₹3,11,538 |
| Service years counted | 9 |
| Tax-free portion | ₹3,11,538 |
| Taxable portion | ₹0 |
Built and reviewed by Savitar Finance (savitarfinance@gmail.com). Rules and rates last checked October 2026. How we calculate · Report a problem
Questions people ask
What is the gratuity formula?
For employers covered by the Act: last drawn basic + DA × 15 × years of service ÷ 26.
How much gratuity is tax-free?
For private-sector employees, up to ₹20 lakh over a career is exempt. Government employees' gratuity is fully exempt.