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Gratuity Calculator

Gratuity payable under the Payment of Gratuity Act, with the tax-exempt portion.

Formula

gratuity = last drawn salary × 15/26 × years of service

Tips

  • The 15/26 factor treats a month as 26 working days and pays 15 days’ wages for each completed year of service.
  • Service beyond six months in the final year rounds up to a full year. Six months or less is ignored.
  • The lifetime tax exemption is ₹20 lakh, aggregated across all employers, not per job.
  • The five-year condition is waived where service ends because of death or disablement.

Frequently asked questions

Does gratuity use my full salary?

No. It uses last drawn basic pay plus dearness allowance, not CTC and not including bonuses or allowances such as HRA. This is why the figure is usually smaller than people expect.