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ICAI Firm Reg No. 016835S+91 97033 11757
Calculate gratuity payable under the Payment of Gratuity Act, 1972.
Indicative result. Final figures may differ based on specific facts.
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The exact formula, statutory references and edge-cases used to compute your result. Reviewed by CA Ankita Jainik Soni.
Gratuity = (Last drawn Basic + DA) × Years of service × 15 / 26. Years of service is rounded up to the next integer if it is 6 months or more. The 5-year minimum service is required for eligibility.
Up to ₹20,00,000 of gratuity per employer is exempt over a lifetime. Any amount exceeding ₹20L is taxed as salary income. For government employees, the entire gratuity is tax-free without ceiling.
The Act applies to establishments with 10 or more employees. For employees of non-covered establishments, the 5-year rule does not apply — gratuity can be paid even before 5 years as per contract.
Years of service is computed from the date of joining to the date of retirement / exit. Periods of leave without pay are excluded. Last drawn salary is the basic+DA at the time of exit, not the highest salary drawn.
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Last updated: 21 June 2026 · Last reviewed by CA Ankita Jainik Soni · Indicative results only