Gratuity Calculator

The formula used

The calculator uses the standard formula for employees covered by the Payment of Gratuity Act: gratuity = last drawn salary × 15 × years of service ÷ 26. "Salary" here means basic pay plus dearness allowance, not the full CTC. Years are rounded down to whole years in this tool.

Worked example

With a last salary of Rs. 50,000 and 10 years of service: 50,000 × 15 × 10 ÷ 26 = Rs. 2,88,462.

Rules the tool does not check

• Eligibility: gratuity is normally payable after at least five years of continuous service (exceptions include death or disability). The tool will calculate a figure for fewer years but that does not mean it is payable.
• Rounding of service: under the Act, a part of a year over six months is typically counted as a full year. This tool floors the years, so 9 years 8 months is treated as 9 here, not 10.
• The cap: there is a statutory maximum on the amount, and tax exemption is limited as well. The tool does not apply either limit.
• Labour codes. The new labour codes, in force since 21 November 2025, changed how "wages" are defined and are being phased in. The tool uses the salary you type and does not apply them, so ask HR which wage figure your employer uses.
• Employers not covered by the Act use a different formula (15 days over 30 days a month), which gives a smaller figure.

For employers' contributions inside your package, see the CTC to take-home calculator.