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Free Gratuity Calculator — India (15/26 × Last Drawn Salary × Years)

November 3, 2026 · 4 min read · By the DollarWise team

How it works

Gratuity is a retirement benefit paid by your employer when you leave after 5 or more years of continuous service. For employees covered under the Payment of Gratuity Act, it is calculated as 15 days of your last drawn salary (basic + dearness allowance) for every completed year of service, based on a 26-working-day month — and the tax-free amount is capped at ₹20 lakh. Enter your last drawn monthly salary and years of service — this calculator applies the standard 15/26 formula, rounds up any partial year over 6 months, applies the cap, and shows your estimated gratuity.

Gratuity Calculator (India)

15 days of last drawn salary per year of service — the statutory formula, capped.

100% Free Forever No Sign-up No Credit Card Private — runs in your browser Unlimited Use

1 Your salary and service

Use basic salary plus dearness allowance only — HRA, special allowances and bonuses are excluded.
A partial year of 6 months or more counts as a full year. Gratuity is generally payable only after 5 years.

2 Confirm the details

This calculator uses the formula for employees covered under the Payment of Gratuity Act, 1972: Gratuity = Last drawn salary × 15/26 × years of service. The tax-free amount is capped at ₹20 lakh. If you are not covered by the Act, your employer may use a half-month per year formula instead — check your offer letter or HR policy.

3 See your gratuity

🎁 Your estimated gratuity

🎉 Free forever. No sign-up. No credit card. No limits.

Run as many scenarios as you like — every calculation happens in your browser.

## How the math works For employees covered under the Payment of Gratuity Act, 1972, gratuity is based on 15 working days of wages for each completed year of service. Since a month is treated as 26 working days, one day's wage = monthly salary / 26, and 15 days' wage = salary × 15/26: **Gratuity = Last drawn salary (basic + DA) × 15/26 × years of service** - A partial year of **6 months or more** counts as a full year; less than 6 months is ignored. - The tax-free gratuity is **capped at ₹20 lakh** (raised from ₹10 lakh in 2018). - "Last drawn salary" means basic + dearness allowance only — not HRA, conveyance, special allowances or bonuses. - The 5-year minimum service rule is waived if employment ends due to death or disablement. ## Everyday uses - **Resignation planning:** before putting in your papers, estimate the gratuity you will receive so it is not a surprise on your final settlement (Form I). - **Job-change decision:** compare a higher salary at a new employer against the gratuity (and other benefits) you would forfeit by leaving before 5 years or before a rounding boundary. - **Retirement checklist:** add your estimated gratuity to PF, NPS and other retiral benefits to project your final retirement corpus. ## Frequently asked questions ### Do I get gratuity if I leave before 5 years? Generally no — gratuity is payable only after 5 continuous years of service with the same employer (or group of employers under common control). The two exceptions are death or disablement of the employee, where gratuity is paid regardless of tenure. If you have, say, 4 years 7 months, that counts as 5 years and you are eligible. ### Is gratuity taxable? Gratuity received by government employees is fully tax-free. For non-government employees covered under the Act, the least of (a) actual gratuity, (b) ₹20 lakh, and (c) 15/26 × salary × years is exempt from tax; any excess is taxable as salary income. The ₹20 lakh limit is a lifetime ceiling across all employers. ### What if my employer is not covered by the Payment of Gratuity Act? Employers with 10 or more employees are covered. If not covered, gratuity is still often paid voluntarily, usually calculated as half a month's average salary (last 10 months) per completed year of service, with no mandatory cap. Check your offer letter, appointment terms or HR policy for your employer's exact formula.