Gratuity Pay Calculator
Estimate your lump sum gratuity pay benefit based on years of continuous service and your last drawn salary.
Gratuity Pay Insights
Understanding your post-employment benefit details:
Qualifying Service
The number of complete continuous years you served at the company.
Eligible Payout
The estimated lump sum gratuity amount payable at resignation or retirement.
Tax Status
Generally exempt from income tax up to ₹20 Lakhs under Section 10(10).
How is it calculated?
Gratuity = \frac{15 \times Last\,Drawn\,Salary \times Years\,of\,Service}{26}Calculated according to the Payment of Gratuity Act. Last drawn salary includes Basic + Dearness Allowance (DA). 26 represents working days per month.
Worked Examples
10 Years of Service with ₹80,000 Last Drawn Salary
Gratuity = (15 * 80,000 * 10) / 26, which yields approximately ₹4,61,538. This is a tax-free payout from your employer if you complete 5+ years of continuous service.
5 Years of Service with ₹40,000 Basic Salary
Gratuity pay is calculated as (15 * 40,000 * 5) / 26, yielding ₹1,15,385.
Gratuity Rules & Payout Calculation Guide
What is Gratuity?
Gratuity is a lump sum payment made by an employer to an employee as a token of appreciation for services rendered, usually upon retirement, resignation, or termination. Under the Payment of Gratuity Act, 1972, establishments employing 10 or more people are legally bound to pay gratuity to eligible employees.
To qualify for gratuity, an employee must have completed a minimum of 5 years of continuous service with the same organization.
The Gratuity Calculation Formula
For employees covered under the Gratuity Act, the formula is:
Gratuity = (15 * Last Drawn Salary * Years of Service) / 26
Where Last Drawn Salary includes Basic Salary + Dearness Allowance (DA), and 26 represents the number of working days in a month. Years of service are rounded off (e.g., 5 years 6 months is treated as 6 years).
Frequently Asked Questions
Is gratuity taxable in India?
Does the 5-year continuous service rule apply in case of death?
Results are estimates and should not be considered financial advice.