Gratuity Calculator

Under the Payment of Gratuity Act, 1972: 15 ÷ 26 × last drawn monthly basic plus dearness allowance × years of service, where six months or more counts as a full year. The 26 reflects working days in a month. Employers not covered by the Act typically use 15 ÷ 30 × average salary × completed years, with no rounding up.

Every factory, mine, port, plantation and railway, and any shop or establishment with 10 or more employees on any day in the previous 12 months. Once covered, an employer stays covered even if headcount later falls below 10.

Yes, gratuity is payable on leaving after five years of continuous service, or on death or disablement without the five-year test. Some High Courts have held that four years and 240 days in the fifth year qualifies, but that is not uniformly applied. The calculator still shows the figure below five years so you can see what it would be.

For employees of central and state government and local authorities, the whole amount. For everyone else, up to ₹20,00,000 over a lifetime across all employers; anything above that is taxed as salary. The exemption sat in section 10(10) of the 1961 Act and continues under the Income-tax Act 2025.

The law uses the average of basic plus DA for the ten months before leaving, not the last month. If your salary changed recently, enter that ten-month average here rather than the final month’s figure.