Calculate your gratuity from last drawn salary and years of service, as per the Payment of Gratuity Act.
Gratuity is a lump-sum reward for long service that an employer pays when you leave after several years, and many employees have no clear idea what they are owed until it is time to resign or retire. This Gratuity Calculator turns your last drawn salary and years of service into the amount payable, so you can plan around it or check that what your employer offers is right.
You enter your last drawn monthly salary, meaning basic pay plus dearness allowance, and your total years of service, and the tool applies the standard formula to show the gratuity figure. You can adjust either input to see how one more year of service or a higher final salary changes the payout, which is helpful when you are deciding on a resignation date.
The method follows the formula under the Payment of Gratuity Act for covered employees, which is fifteen days of salary for every completed year of service, calculated as last drawn salary multiplied by the years of service multiplied by fifteen, divided by twenty-six, since twenty-six is treated as the number of working days in a month. As an example, a last drawn salary of 52,000 with ten years of service gives 52,000 times ten times fifteen divided by twenty-six, which is 3,00,000. A period beyond six months in the final year is generally rounded up to a full year, and this assumes an employer covered by the Act.
Use this rather than a rough mental estimate whenever you are near the eligibility mark, usually five years of continuous service, because whether you cross that line decides if you get anything at all. It is also more reliable than assuming gratuity equals a month's pay per year, which overstates it, since the formula works out to roughly half a month of pay for each year served.
Employees use it to time a resignation so a partial year rounds up, to check a full-and-final settlement from an employer, to estimate a retirement corpus, and to compare what two employers would pay for the same tenure. Anyone approaching the five-year threshold can see exactly what waiting a few more months is worth.
The calculation runs entirely in your browser. Your salary and service details are never sent anywhere, there is no account needed, and nothing is stored once you close the tab, so the only limit is your device. Gratuity rules and any tax exemption ceiling can change, so confirm the current provisions for your situation.
Under the standard rule, continuous service of five years is generally required, with limited exceptions such as death or disablement. If you leave before that threshold, gratuity is usually not payable, which is why the exact resignation date can matter.
For covered employees it is basic salary plus dearness allowance, not your full CTC or gross pay. Allowances like HRA and bonuses are typically excluded, so use the basic-plus-DA figure or your result will be too high.
The Act treats a month as 26 working days, excluding the usual weekly offs, and pays fifteen days of wages for each year of service. Dividing by 26 rather than 30 is what makes the monthly salary translate into that fifteen-day entitlement.
Service beyond six months in the last year is generally rounded up to a full year, while six months or less is dropped. That single rule means resigning a little later can sometimes add a whole year to your calculation.
A portion of gratuity is exempt from income tax up to a ceiling, and the rules differ for government and private employees. The exemption limit has changed over the years, so check the current cap before assuming the full amount is tax-free.
The formula here follows the Payment of Gratuity Act for covered employers, which is most establishments above a size threshold. If your employer is not covered, gratuity may be calculated differently, so confirm which basis your company uses.
Yes, the Act sets a minimum, and an employer is free to pay more generous gratuity as a matter of policy. What this calculator shows is the statutory entitlement, so a better company scheme could exceed it.
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