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Gratuity Calculator — Calculate Your Gratuity Amount

Calculate gratuity payable under the Payment of Gratuity Act based on your last drawn salary and years of service.

Employment Details
Yr
5 Yr40 Yr

Gratuity Amount

₹2,88,462

Tax-Exempt

₹2,88,462

Under Section 10(10)

Taxable Amount

₹0

Fully exempt

Understanding Gratuity in India

Gratuity is a lump-sum amount paid by an employer to an employee as a token of appreciation for services rendered. It is governed by the Payment of Gratuity Act, 1972. The act applies to factories, mines, oilfields, plantations, ports, railway companies, shops, and establishments with 10 or more employees. The maximum tax-exempt gratuity amount was raised from ₹20 lakh to ₹25 lakh in the 2024 budget.

Formula & How It Works

Formula
Gratuity = (15 × Last Drawn Salary × Years of Service) / 26

15 represents 15 days of wages, 26 represents working days in a month.

Last Drawn Salary includes Basic Pay + Dearness Allowance.

Minimum 5 years of continuous service is required for eligibility.

Worked Example

Monthly salary (Basic + DA): ₹50,000. Years of service: 10 years.

Gratuity = (15 × 50,000 × 10) / 26 = ₹2,88,462.

This amount is tax-exempt up to ₹25,00,000.

Benefits of Using Gratuity Calculator

Know your exact gratuity entitlement before retirement or resignation.

Plan your exit finances by combining gratuity with other retirement benefits.

Understand tax implications — gratuity up to ₹25 lakh is tax-exempt.

Verify employer's gratuity calculation for accuracy.

Common Mistakes to Avoid

Not completing 5 years of service — you lose gratuity entitlement entirely.

Confusing total salary with Basic + DA — only Basic + DA is used for calculation.

Not knowing that years of service > 6 months are rounded up (4 years 7 months = 5 years).

Assuming gratuity is fully tax-free — amounts above ₹25 lakh are taxable.

Frequently Asked Questions