Gratuity Calculator

Gratuity is a lump sum payment made by an employer to an employee as a token of appreciation for their continuous service. It is governed by the Payment of Gratuity Act, 1972.

Any employee who has completed 5 or more years of continuous service with an employer is eligible for gratuity. This applies to organisations with 10 or more employees.

Gratuity = (Last drawn basic salary × 15 × Years of service) ÷ 26. The "26" represents working days in a month. For partial years beyond the last completed year, 6+ months counts as a full year.

For private sector employees, gratuity up to ₹20 lakh is fully exempt from income tax. Any amount above ₹20 lakh is taxable as per your income tax slab.

Yes, many employers include gratuity in the CTC (4.81% of basic salary per year). However, it is only paid out on separation — not as monthly income. Check your offer letter for whether it is in your CTC.

Generally no, unless you resign due to disability or death. However, in practice, some employers pay ex-gratia amounts as goodwill even below 5 years — this is not legally mandated.

Yes. For companies under the Gratuity Act, the formula uses Basic + Dearness Allowance (DA). For most private sector companies that do not pay DA, only basic salary is used.

Gratuity must be paid within 30 days of the employee becoming eligible (resignation, retirement, or death). Delayed payment beyond 30 days attracts interest as per the Act.