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Work out your gratuity from last drawn basic plus DA and years of service. Applies the six-month rounding rule and shows the Rs 20 lakh tax-free limit.
Estimated gratuity
โน5,76,923.08
Gratuity results are estimates for planning and should be checked against current official rules or professional advice where applicable.
Leaving a job after 12 years and 7 months on a last basic of Rs 60,000? Your gratuity would be Rs 4,50,000 under the Payment of Gratuity Act. This gratuity calculator works that out from two inputs: last drawn basic plus DA, and years of service. It also applies the rounding rule that many people miss.
Gratuity = (15 / 26) x (last drawn basic + DA) x years of service
The 15 stands for 15 days of wages for every year served. The 26 reflects working days in a month, leaving out four weekly offs. So each year of service earns a little over half a month's basic pay.
Under the Act, a part year of more than six months counts as a full year. Six months or less is simply dropped. That single rule can shift your payout by a whole year's gratuity. At a Rs 60,000 basic, that is Rs 34,615.
| Actual service | Years counted | Gratuity at Rs 60,000 basic + DA |
|---|---|---|
| 9 years 5 months | 9 | Rs 3,11,538 |
| 9 years 6 months | 9 | Rs 3,11,538 |
| 9 years 7 months | 10 | Rs 3,46,154 |
| 12 years 7 months | 13 | Rs 4,50,000 |
Is your resignation date a few weeks short of the six-month mark? Serving those extra days may be worth it. Check the exact joining date on your appointment letter first.
The Payment of Gratuity Act applies to establishments with 10 or more employees. If your employer is not covered, it may still pay gratuity voluntarily. In that case the formula is less generous.
| Basis | Covered by the Act | Not covered |
|---|---|---|
| Formula | 15/26 x salary x years | 15/30 x salary x years |
| Salary used | Last drawn basic + DA | Average of the last 10 months |
| Part year | Over 6 months rounds up | Only completed years count |
Take the same Rs 60,000 salary and 12 years 7 months of service. A non-covered employee is credited with 12 completed years only. The payout works out to Rs 3,60,000, which is Rs 90,000 less than the covered case.
The Code on Social Security, 2020 also changes some gratuity rules, such as eligibility for fixed-term staff after one year. How your employer applies the new codes can affect both eligibility and the wage base. Ask HR which rules they follow.
Cross-check the result against your full and final settlement. If the figures differ, ask HR which salary components and service dates they used.
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Estimated gratuity = Last drawn eligible salary ร 15 รท 26 ร completed years.This describes the core logic used by the tool. Check any assumptions that may affect your result.
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Gratuity is calculated on basic salary plus dearness allowance, not your CTC. HRA, special allowance, bonus and reimbursements are left out. That is why two people with the same CTC can receive very different gratuity amounts on leaving.
Possibly, but it is not guaranteed. Some High Court rulings have treated 4 years and 240 working days as five years of continuous service. Many employers still insist on a full five years, so check your company's written policy.
For private-sector employees, the tax-free ceiling is Rs 20 lakh across your entire working life. Your employer can choose to pay more than that. Anything above Rs 20 lakh is added to your salary income and taxed at slab rates.
Twenty-six represents the working days in a month after excluding four weekly offs. Courts have upheld this divisor for monthly-paid staff for decades. Employees not covered by the Act use 30 instead, which produces a smaller payout.
Yes, gratuity is payable on termination once the service condition is met. An employer can forfeit it, wholly or partly, only on specific grounds. These include wilful damage, riotous conduct or an offence involving moral turpitude, established through due process.
The employer should pay within 30 days of the gratuity becoming payable. If payment is late, simple interest is due on the outstanding amount. You can approach the controlling authority under the Act if the money still does not arrive.
Yes. The gratuity exemption under Section 10(10) is available in both the old and new tax regimes. The Rs 20 lakh limit stays the same. Only the portion above that limit is added to your taxable salary for the year.
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