Gratuity calculator
What your employer owes on exit after 5+ years of service — the statutory 15/26 formula with the exact rounding rule, and the tax-exemption cap.
How gratuity is computed
Covered under the Act: gratuity = (15 ÷ 26) × last drawn Basic+DA × years of service, where a final part-year counts as a full year only when it exceeds six months (10y 7m → 11 years; 10y 4m → 10). The 15/26 reflects 15 days' wages on a 26-working-day month.
Not covered: (15 ÷ 30) × average salary of the last 10 months × completed years, with no rounding up.
Worth knowing
- Eligibility: 5 years of continuous service (waived on death or disablement). Courts have treated 4 years + 240 days as qualifying (Madras HC, Mettur Beardsell) — persuasive but not guaranteed everywhere.
- Since Nov 2025 (Code on Social Security), fixed-term employees get pro-rata gratuity after just 1 year.
- Tax: for private-sector employees the exemption is the least of the formula amount, the actual amount received, and ₹20,00,000 (lifetime). Government employees' gratuity is fully exempt. The cap was not changed by Budget 2025 or 2026.
- Some calculators round up at exactly 6 months; the statute says "in excess of six months", which is what we follow.
For information only — not legal or tax advice. Actual entitlement depends on your employment terms, continuous-service determination and employer policy (employers can pay more than the statutory minimum). Verify with HR or a professional.