Gratuity Calculator

What is a Gratuity Calculator?

A gratuity calculator estimates the gratuity payable when you leave a job or retire, from your last drawn basic salary plus dearness allowance and the number of years of service.

Gratuity Calculator applies the standard formula used under the Payment of Gratuity Act and carried into the Code on Social Security: 15 days of last drawn pay for every year of service, using a 26-day month. For employers outside the law, a 30-day month on completed years is a common basis.

How does the Gratuity Calculator work?

For employers covered by the gratuity law, gratuity is 15 days of last drawn pay for every year of service, using 26 working days in a month. Service of 6 months or more in the final year counts as a full year.

Gratuity = 15 × last drawn (basic + DA) × years of service ÷ 26

How to use the Gratuity Calculator

1. Enter the last drawn basic + da (monthly) (anywhere from ₹1,000 to ₹20,00,000). Type it in the box or drag the slider.
2. Enter the years of service (anywhere from 1 year to 50 years). Type it in the box or drag the slider.
3. Enter the plus months (anywhere from 0 months to 11 months). Type it in the box or drag the slider.
4. Choose employer covered by gratuity act: Yes or No.
5. Read the gratuity amount at the top of the results, then check the breakdown below it.
6. Change one input at a time to compare scenarios, and note how much each change moves the result.

Benefits of using the Gratuity Calculator

• Applies the current rules step by step, so you can see how the final figure is reached.
• Lets you test different amounts and options before you file, sign an offer or raise an invoice.
• Shows the breakdown, not just a single number, which makes it easier to check payslips, invoices or Form 16.
• Free, instant and private: nothing you enter is stored.

Mistakes to avoid with the Gratuity Calculator

The common mistake is using CTC instead of basic + DA in the formula.

The years counted and the pay base drive the result; check how your last year of service is rounded.

Helpful checks before using the result

These checks make a gratuity more useful in practice.

• Start with a realistic base case rather than the first value that fits the range slider.
• Change one major assumption at a time so the effect stays easy to interpret.
• Use the result to compare scenarios, not as a final provider quote or guaranteed outcome.
• Verify rates, rules, and product terms separately before acting on the estimate.

Gratuity rules that change the amount

Service length and pay definition matter most.

• In covered establishments, a final year with 6 months or more of service counts as a full year.
• Gratuity is normally payable after 5 years of continuous service; it is payable earlier on death or disablement.
• For private-sector employees, gratuity up to ₹20 lakh is exempt from tax; government employees’ gratuity is fully exempt.
• Under the labour codes, wages for gratuity must include at least half of total pay, which can raise the base used in the formula.

Gratuity examples

For a covered employer.

Gratuity Calculator FAQs