Gratuity Calculator

What is gratuity?

Gratuity is a lump sum your employer pays you as a thank-you for long service, when you resign, retire, are laid off, or in case of death or disability. In India it is governed by the Payment of Gratuity Act, 1972, which from 21 November 2025 is part of the Code on Social Security, 2020 (one of the four new labour codes). This gratuity calculator India tool works out the amount using the official formula and shows how much of it is tax-free, with rules current as of 2026.

How to use the gratuity calculator

1. Enter your last drawn monthly basic salary plus dearness allowance (DA). For private employees without DA, enter basic only.
2. Enter your completed years and extra months of service, counted from your date of joining to your exit date.
3. Choose your employee type: covered by the Act, not covered, fixed-term, or government.
4. If you already received tax-free gratuity from an earlier employer, enter it so the calculator applies the lifetime limit correctly.

Gratuity formula in India

Employees covered by the Gratuity Act (most companies with 10+ staff)

Gratuity = Last drawn salary × 15 ÷ 26 × Years of service

• Last drawn salary = monthly basic + DA
• 15 = 15 days' wages for every completed year
• 26 = working days in a month (the Act treats a month as 26 days)
• Years of service = completed years; a part year of 6 months or more is rounded up

Employees not covered by the Act

Gratuity = Average salary of last 10 months × 15 ÷ 30 × Completed years

Here a month is taken as 30 days and part years are ignored.

Gratuity calculation example

Your last drawn basic + DA is ₹60,000 a month and you worked for 10 years at a company covered by the Act:

Gratuity = 60,000 × 15 ÷ 26 × 10 = ₹3,46,154. All of it is tax-free because it is below ₹20 lakh.

If you had worked 10 years and 7 months, the service rounds up to 11 years and the gratuity becomes ₹3,80,769. With 10 years and 5 months it stays at 10 years.

Gratuity eligibility: how many years?

• Permanent employees need 5 years of continuous service. Several High Courts have held that 4 years and 240 working days counts as five years (190 days for establishments working five days a week), so check with your HR if you are close.
• Fixed-term employees: under the new labour code, they get pro-rata gratuity after just 1 year of service.
• Death or disablement: no minimum service is needed; the gratuity goes to the employee or nominee.
• The Act applies to every establishment that has employed 10 or more people on any day in the previous 12 months, and it continues to apply even if staff numbers later fall.

So, "how much gratuity will I get after 3 years?" – usually none, unless you are a fixed-term employee or the exit is due to death or disability. A fixed-term employee with ₹40,000 basic after 3 years gets 40,000 × 15 ÷ 26 × 3 = ₹69,231.

What changed with the new labour code?

The formula did not change. What changed is the definition of wages: under the Code on Social Security, basic + DA + retaining allowance must be at least 50% of total pay. If allowances are more than 50%, the excess is added back to wages. For many private employees whose basic was only 30–40% of CTC, this raises the salary on which gratuity is calculated, and so raises the gratuity. Fixed-term workers also became eligible after one year.

Is gratuity taxable? Tax-free limit 2026

The ₹20 lakh limit applies to your whole career: if you received ₹5 lakh tax-free from a previous employer, only ₹15 lakh more can be exempt. Any extra gratuity is added to your salary income and taxed at your slab rate under both regimes. For central government employees, the payment ceiling is ₹25 lakh (raised when DA crossed 50% in 2024), and the amount is fully tax-free. To see the tax on a taxable part, add it to salary in the income tax calculator.

How to calculate gratuity in CTC

Many employers include a gratuity provision of 4.81% of basic in your CTC. That figure is 15 ÷ 26 ÷ 12 = 4.81%, one year's worth of gratuity spread across 12 months. You receive it only when you leave after becoming eligible. The salary calculator removes it from CTC when working out in-hand pay.

Gratuity for central government employees

Retirement gratuity under the CCS rules is one-fourth of basic pay + DA for each completed six-monthly period of qualifying service, up to 16.5 times the monthly emoluments, and capped at ₹25 lakh. That usually works out higher per year than the 15/26 rule. Use the government option above for a quick estimate and check the exact figure with your department.

Planning with your gratuity

Gratuity, EPF and NPS together form most people's retirement money. See how your provident fund builds up with the EPF calculator, and whether you are on track with the retirement calculator.

Gratuity calculator with example for 1, 4 and 5 years

Every gratuity calculator with example below uses a last drawn basic + DA of ₹30,000 a month and the 15 ÷ 26 formula for a private company covered by the Act.

A gratuity calculator for 5 years gives 30,000 × 15 ÷ 26 × 5 = ₹86,538. A gratuity calculator for 1 year applies only to fixed-term staff under the new labour code, or to death and disability cases. For 4 years gratuity calculation, the answer is nil for a permanent employee unless the extra days bring service to 4 years and 240 days, which several High Courts count as five years.

Gratuity calculator with date of joining and exit date

To use a gratuity calculator with date of joining and exit date, count the completed years and leftover months between the two dates and enter them above. Joining 1 June 2016 and leaving 15 February 2026 is 9 years and 8 months; because 8 months is more than 6, service is rounded up to 10 years under the Act. That is all the joining-date logic amounts to: years plus months, rounded at six months.

Gratuity calculator in months and how many years count

A gratuity calculator in months only matters for the last part-year: 6 months or more counts as a full year, less is dropped. For gratuity calculator how many years questions, the minimum is 5 years of continuous service for permanent employees and 1 year for fixed-term employees.

Gratuity calculator online for private company employees

Most private companies with 10 or more employees are covered by the Act, so a gratuity calculator online for private company staff uses the 15 ÷ 26 formula. A gratuity calculator for private employees without DA simply uses basic pay as the last drawn salary – enter basic only. If your company is not covered, choose that option and the calculator uses 15 ÷ 30 on the average of the last 10 months.

Gratuity calculator as per new labour law (2025 rules)

The gratuity calculator online as per new rule keeps the same formula, but under the new labour law wages must be at least 50% of total pay. Example: CTC pay of ₹1,00,000 a month with basic ₹35,000 and allowances ₹65,000 – the excess allowance of ₹15,000 is added back, so gratuity is calculated on ₹50,000, not ₹35,000. For 10 years that is ₹2,88,462 instead of ₹2,01,923. The gratuity calculator with new labour law therefore raises payouts for low-basic salary structures, and fixed-term staff qualify after one year.

Gratuity calculator monthly and percentage

Gratuity builds up at 15 days' wages a year, which is 4.81% of basic + DA. So the answer to "gratuity calculator how much percentage" is 4.81% of basic per year of service, and the gratuity calculator monthly accrual on a ₹30,000 basic is about ₹1,442 a month. That 4.81% is the percentage employers put in your CTC.

Gratuity calculator for central government employees and MP govt employees

A gratuity calculator for central government employees uses the CCS rules: one-fourth of basic + DA for each six-monthly period of service, up to 16.5 months' emoluments and ₹25 lakh, fully tax-free. State employees follow their own pension rules; a gratuity calculator for MP govt employees (Madhya Pradesh) or any other state uses the state's formula and ceiling, which your department's pension cell can confirm. Government gratuity is fully tax-exempt in every case.

Gratuity calculator in Hindi: formula

ग्रेच्युटी का फॉर्मूला (gratuity calculator formula in Hindi): ग्रेच्युटी = अंतिम मूल वेतन + महंगाई भत्ता × 15 ÷ 26 × सेवा के वर्ष। Gratuity calculator kaise karte hain: अपनी आखिरी बेसिक सैलरी + DA, नौकरी के साल और महीने डालें; 6 महीने या उससे ज़्यादा को पूरा साल माना जाता है। कम से कम 5 साल की लगातार सेवा ज़रूरी है (फिक्स्ड-टर्म कर्मचारियों के लिए 1 साल)।

Gratuity calculator for UAE and Dubai (end of service)

In the UAE, gratuity is the end-of-service benefit under the UAE Labour Law, not the Indian formula. A gratuity calculator for the UAE uses basic salary only: 21 days' basic pay for each of the first 5 years and 30 days' basic pay for each year after that, capped at two years' total wages, with at least one year of service needed. Example in Dubai: basic AED 10,000 a month for 7 years – daily wage = 10,000 × 12 ÷ 365 = AED 328.77; 105 days for the first 5 years + 60 days for the next 2 = 165 days, or about AED 54,247. A gratuity calculator for a free zone in Dubai such as JAFZA follows the same federal rules, while DIFC staff receive employer contributions to the DEWS savings plan instead.

Gratuity calculator for Qatar

In Qatar, the labour law requires end-of-service gratuity of at least three weeks' basic wage for every year of service, once the worker completes one year. Contracts can give more, so check yours before relying on the minimum.

Frequently asked questions

Last updated 2026-09-18