Calculate Your Gratuity
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Detailed breakdown of your gratuity calculation
Fill in your employment details on the left to see your personalized gratuity calculation with tax implications.
What is Gratuity?
Gratuity is a defined benefit plan where the employer pays a one-time amount to the employee upon leaving the organization after a minimum service period. It's entirely funded by the employer and acts as a financial safety net for retirement, resignation, or unfortunate events like death or disablement.
The Payment of Gratuity Act, 1972, mandates this benefit for eligible establishments, ensuring employees receive 15 days' wages for each completed year of service, subject to a cap.
Employer Funded
Unlike PF, gratuity is entirely paid by the employer - no deductions from your salary.
Statutory Benefit
Mandatory for companies with 10+ employees under the Payment of Gratuity Act, 1972.
Tax Benefits
Up to ₹20 lakhs is tax-free for private employees, making it a valuable retirement benefit.
Long-term Security
Provides financial security after 5 years of continuous service with the same employer.
Eligibility Criteria
Service Duration Requirements
- Standard Rule: 5 years of continuous service is required
- Exception: In cases of death or disablement due to accident or disease, this condition is waived
- Pro-rata Rule: Completing 4 years and 240 days counts as 5 years
- Fixed-term Contracts: Pro-rata gratuity for 1+ year contracts under new rules
Establishment Coverage
- Factories, mines, oilfields, plantations, ports, railways, shops
- Establishments with 10 or more employees in the preceding 12 months
- Once applicable, it remains even if employee count drops below 10
Calculation Formulas
For Covered Employees (Most Private Companies)
Formula:
Gratuity = (Last Drawn Salary × 15 × Years of Service) ÷ 26
Note: Years are rounded up if the fractional part exceeds 6 months
For Non-Covered Employees
Formula:
Gratuity = (Last Drawn Salary × 15 × Years of Service) ÷ 30
For Government Employees
Formula:
Gratuity = Last Drawn Salary × 6 months
Government employees have different calculation methods and are fully tax-exempt