Calculate your gratuity amount as per the Payment of Gratuity Act 1972.
This tool estimates the gratuity amount payable to an employee under India's Payment of Gratuity Act, based on years of service and last drawn salary. Gratuity is a lump-sum benefit paid by employers to employees who complete a minimum period of continuous service.
Gratuity = (Last Drawn Salary × 15 × Number of Years of Service) ÷ 26, applicable to employees covered under the Act, where salary typically refers to basic pay plus dearness allowance, and 26 represents the standard working days in a month used in this formula.
Enter your last drawn monthly salary and total years of service, and the calculator estimates your gratuity payout based on the standard formula.
Example: An employee with a last drawn salary of ₹50,000 and 10 years of service would have an estimated gratuity of (50,000 × 15 × 10) ÷ 26 ≈ ₹2,88,462.
What is the minimum service period required to be eligible for gratuity? Under the Payment of Gratuity Act, an employee generally needs to complete at least 5 years of continuous service with the same employer to be eligible, with certain exceptions such as death or disablement.
Is gratuity taxable? Gratuity received by government employees is generally fully exempt from tax, while for private sector employees, exemption applies up to a specified limit under the Act, with amounts beyond that limit subject to taxation.
How is "years of service" calculated if I worked a partial year? Under the standard formula, service periods of more than 6 months are typically rounded up to the next full year, while periods of 6 months or less may be rounded down, though specific employer policies can vary.
Does gratuity apply to all employers? The Payment of Gratuity Act typically applies to establishments with 10 or more employees, though some organizations may offer gratuity benefits voluntarily even if not strictly required by the Act.
Is gratuity the same as provident fund (PF)? No, these are separate benefits — gratuity is a lump-sum payment from the employer based on service tenure and salary, while provident fund is a retirement savings scheme involving regular contributions from both employee and employer throughout employment.