Gratuity Calculator
Calculate gratuity amount for salaried employees in India
Employment Details
Basic salary + Dearness Allowance (DA)
Minimum 5 years of service required
Companies with 10+ employees (÷26 formula)
Eligibility Criteria:
• Minimum 5 years of continuous service
• Applicable on resignation, retirement, or termination
• Death or disability: no minimum service period
Maximum Limit: ₹20,00,000
Gratuity Amount
Calculation Formula
For employees covered by Gratuity Act:
(Salary × 15 × Years) ÷ 26
Tax Treatment:
Government Employees: Fully tax-exempt
Private Sector (covered by Act):
• Tax-free up to ₹20 lakhs
• Excess amount is taxable
Others:
• Tax-free up to lower of ₹20L or actual gratuity
What is Gratuity?
Gratuity is a lump sum amount paid by an employer to an employee as a token of appreciation for services rendered to the company. It is governed by the Payment of Gratuity Act, 1972.
It becomes payable when an employee completes five years of continuous service and leaves the organization due to retirement, resignation, death, or disability.
Key Points
- •Applies to companies with 10 or more employees
- •Minimum 5 years of service required (except death/disability)
- •Maximum limit: ₹20 lakhs (as per current law)
- •Calculated based on last drawn salary + DA
- •Payable within 30 days of becoming due