Gratuity Calculator

Calculate your gratuity as per the Payment of Gratuity Act, including the ₹20 lakh tax-free limit.

Total Gratuity

₹2,88,462

Tax-Free (max ₹20L)

₹2,88,462

Taxable Portion

₹0

Formula (covered): Gratuity = (15 / 26) × Last drawn (Basic + DA) × Years of service. The maximum tax-free gratuity under the Payment of Gratuity Act is ₹20,00,000.

Advertisement

What is Gratuity?

Gratuity is a lump-sum benefit your employer pays as a token of appreciation when you leave the organisation after completing at least 5 years of continuous service. It is governed by the Payment of Gratuity Act, 1972.

Gratuity Formula

Covered by the Act: Gratuity = (15 / 26) × Last drawn (Basic + DA) × Years of service

Not covered: Gratuity = (15 / 30) × Average salary × Completed years

Example Calculation

Last basic + DA = ₹50,000, service = 10 years, employer covered by Act:

  • Gratuity = (15 / 26) × 50,000 × 10 = ₹2,88,461
  • Fully tax-free (well under the ₹20 lakh limit)

Tax Treatment

  • Government employees: fully tax-free
  • Private employees covered by the Act: tax-free up to ₹20 lakh in their lifetime
  • Excess over ₹20 lakh: taxable as salary

More retirement & salary tools:NPS Calculator,PPF Calculator,HRA Calculator,Income Tax Calculator.