Gratuity Calculator
Calculate your gratuity entitlement, tax exemption and taxable amount under the Payment of Gratuity Act, 1972 — live, on one screen.
- Free — no sign-up
- Instant, on-screen results
- Built by our CA · CS team
- Rules cited on the page
Enter your figures — the result on the right updates as you type.
Gratuity & tax breakdown
Section 10(10)Get your ITR filed with gratuity reported correctly
Our CAs handle the Section 10(10) exemption, Schedule S and taxable-gratuity reporting accurately.
Disclaimer: Indicative estimate for non-government employees. Actual gratuity and exemption may vary with your terms of service and past exemptions claimed. Rules per the Payment of Gratuity Act, 1972 and Section 10(10) of the Income Tax Act.
How gratuity is calculated
Gratuity is a lump sum paid for long service. The formula depends on whether your employer is covered under the Payment of Gratuity Act, 1972. Covered employers divide by 26 (working days in a month); non-covered employers divide by 30 (calendar days).
Eligibility & the rounding rule
A minimum of five years of continuous service is required to be eligible for gratuity — except where employment ends due to death or disability, when the five-year rule is waived.
Tax exemption under Section 10(10)
For non-government employees, gratuity is tax-free up to a lifetime ceiling. The exempt amount is the least of three figures: the actual gratuity received, the statutory maximum limit, and the formula-based amount. Anything above the exempt amount is added to your salary income and taxed at your slab rate.
Actual gratuity received
The gratuity your employer actually pays you — computed from the 15/26 or 15/30 formula on your last drawn Basic + DA.
Statutory maximum limit
The lifetime tax-free ceiling for non-government employees under Section 10(10) — currently ₹20,00,000 across all employers.
Formula-based exemption
15/26 (covered) or 15/30 (not covered) × last Basic + DA × years of service — the statutory computation of exempt gratuity.
Taxable gratuity
Any gratuity above the least of the three above is taxable, added to your income under the head Salaries and taxed at your applicable slab.
How the Gratuity Calculator works
4 steps, start to finish — the same order the tool follows.
- 01Enter your last drawn monthly salary (Basic + DA).
- 02Enter completed years of service and any additional months.
- 03Select whether you are covered under the Payment of Gratuity Act.
- 04Calculate to see your gratuity amount plus the exempt and taxable split under Section 10(10).
Questions people ask
Short answers on Gratuity Calculator. Tap a question to open it.
01How is gratuity calculated?
For employees covered under the Act, gratuity equals 15/26 times last drawn Basic+DA times years of service. For those not covered, the divisor is 30 instead of 26.
02What is the formula for calculating gratuity in India?
Gratuity is calculated as (Last drawn basic salary + DA) × 15/26 × Number of years of service. The factor 15/26 represents 15 days out of 26 working days in a month. For employees not covered by the Payment of Gratuity Act, the formula uses 15/30.
03When am I eligible for gratuity?
You generally need 5 years of continuous service. This condition is waived if service ends due to death or disability. A part-year of 7 or more months rounds up to a full year.
04What is the maximum gratuity amount exempt from tax?
For employees covered by the Payment of Gratuity Act, 1972, gratuity up to Rs 20 lakh is exempt from income tax under Section 10(10). For government employees, the entire gratuity is exempt. For others, the exemption is limited to Rs 20 lakh or actual gratuity, whichever is lower.
05How much gratuity is tax-free?
For non-government employees the exemption under Section 10(10) is the least of actual gratuity, the formula amount, and the statutory cap of ₹20,00,000. Anything above the exempt amount is added to taxable income.
06Is gratuity payable if an employee resigns before 5 years?
No. Gratuity is payable only after completion of 5 years of continuous service. The 5-year rule is waived if an employee dies or becomes permanently disabled before completing 5 years, in which case gratuity is payable to the nominee or legal heir.
07Is gratuity paid by all employers?
Establishments with 10 or more employees are covered by the Act and must pay gratuity. Others may still pay voluntarily, often using the 15/30 formula.
08Are contract employees and part-time workers eligible for gratuity?
The Payment of Gratuity Act applies to establishments with 10 or more employees. Contract workers on the payroll of a principal employer may be eligible, but those employed through contractors on a short-term basis may not qualify unless they meet the 5-year continuous service condition.
09Within how many days must the employer pay gratuity?
Under the Payment of Gratuity Act, the employer must pay gratuity within 30 days from the date it becomes payable. If delayed, simple interest at the rate notified by the government is payable. The current rate is the bank rate as prescribed by RBI.
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Disclaimer: This tool gives indicative results for general guidance only and is not professional advice. Please verify with a qualified CA before acting on the numbers.