Money tools
Gratuity calculator — know your exit payout
Leaving a job after 5+ years? Estimate your gratuity using the exact Payment of Gratuity Act formula, including the rounding rules and ₹20 lakh tax ceiling that most calculators ignore.
Gratuity planner
Estimate Leaving Benefits
Estimated payout
Gratuity payable on exit
Estimated gratuity
₹1,73,077
Formula used: (15 × last drawn salary × qualifying years) ÷ 26
Qualifying years: 10 year(s)
Gratuity is tax-exempt up to ₹20 lakh for private-sector employees covered by the Act. Amounts are indicative — your final settlement follows the employer's payroll records.
Planning a farewell? Send the leaving letter with your final invoice via the invoice tool — or explore all money tools.
FAQ
Gratuity questions
Who is eligible for gratuity in India?
Employees with at least 5 years of continuous service under an employer covered by the Payment of Gratuity Act, 1972 — typically factories, shops, and establishments with 10 or more employees. The 5-year rule is waived in cases of death or disability.
How is gratuity calculated?
For employers covered by the Act: (15 × last drawn basic salary + DA × completed years) ÷ 26. A service fraction above six months rounds up to a full year. Employers not covered by the Act commonly pay half a month's salary per year of actual service.
Is gratuity taxable?
For private-sector employees covered by the Act, the least of: actual gratuity, ₹20 lakh, or salary-based statutory formula is exempt from income tax. Amounts above the ₹20 lakh ceiling are taxed as income.
Does 7 years 7 months count as 8 years for gratuity?
Yes — under the Act, any service period beyond 6 months in the final year rounds up to a full year. So 7 years 7 months qualifies as 8 years when applying the 15/26 formula.