| Years counted | 10 |
|---|---|
| Last drawn basic plus DA | ₹50,000 |
| Formula: salary × 15 ÷ 26 × years | ₹2,88,462 |
| Gratuity payable | ₹2,88,462 |
This is an estimate for planning, not tax, legal or accounting advice. Check figures with a qualified professional before you rely on them.
How it works
Gratuity is a lump sum paid by an employer to an employee who leaves after long service. The Payment of Gratuity Act, 1972 sets the formula: fifteen days' wages for each completed year of service, where a month is taken as 26 working days.
Eligibility (such as the minimum service period and the cases where it is waived) depends on the Act and your employment terms. This calculator only applies the formula; it does not decide whether gratuity is payable or how much of it is tax-exempt.
Formula notes
- Covered by the Act: gratuity = last drawn basic plus DA × 15 ÷ 26 × years of service. A part of a year of more than 6 months counts as a full year.
- Not covered by the Act: gratuity = last drawn basic plus DA × 15 ÷ 30 × completed years of service.
- The amount is limited to ₹20,00,000, the limit under the Act.
- Tax treatment of the amount is not worked out here.
Sources
Estimate, not tax advice. Check figures with a qualified professional before you rely on them.
Common questions
How is gratuity calculated?
Last drawn basic plus DA, times 15, divided by 26, times the years of service. For example, ₹50,000 and 10 years gives ₹2,88,462.
Does 7 years and 7 months count as 8 years?
Yes, for an employer covered by the Act, a part of a year of more than six months is counted as a full year.
Is there a maximum gratuity?
The Payment of Gratuity Act sets a limit of ₹20,00,000. Employers can pay more under their own policy.
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