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Gratuity
Estimate the gratuity payable to an employee under India's Payment of Gratuity Act, 1972 — in seconds.
Estimated Gratuity
How to use the gratuity calculator
Enter the last drawn monthly salary
Use Basic pay plus Dearness Allowance (DA) only — HRA, bonuses and other allowances don't count toward gratuity.
Enter years and months of service
Count full years separately from the leftover months in the final year — the calculator applies the Act's own rounding rule for you.
Pick whether the Act applies
Most private employers with 10 or more employees are covered, which uses a 26-day divisor instead of 30.
Read your result
See the estimated gratuity payout and the number of years it's counted, including a note if the statutory ceiling applies.
What is gratuity?
Gratuity is a lump-sum, one-time payment an employer makes to an employee as a reward for continuous, long-term service — paid on resignation, retirement, termination or death, after at least 5 years of service.
- Who's eligible: employees who've completed 5 or more years of continuous service (waived for death or disablement; fixed-term employees qualify after 1 year, pro-rata).
- What counts as salary: only Basic pay and Dearness Allowance (DA). HRA, bonuses, commissions and other allowances are excluded.
- The statutory ceiling: gratuity is capped at ₹20,00,000 for private-sector employees under the Act, regardless of what the formula works out to.
The gratuity formula
The formula depends on whether the employer is covered under the Payment of Gratuity Act, 1972 — coverage changes the divisor, not the right to gratuity itself.
Covered under the Act: (Last drawn salary × 15 × Years of service) ÷ 26
Not covered under the Act: (Last drawn salary × 15 × Years of service) ÷ 30
Rounding rule: a final-year remainder of more than 6 months rounds the whole year up; 6 months or less rounds it down.
Whatever the formula returns, the payout is capped at the statutory ceiling of ₹20,00,000 for private-sector employees (₹25,00,000 for central government employees).
Covered vs. not covered — what's the difference?
The Payment of Gratuity Act, 1972 applies to any establishment with 10 or more employees.
Covered establishments: Use a 26-day divisor — the number of working days assumed in a month — which produces a slightly higher gratuity for the same salary and tenure.
Establishments not covered: Employers can still choose to pay gratuity voluntarily, typically using a 30-day divisor (a full calendar month), which produces a somewhat lower amount.
Gratuity calculator — frequently asked questions
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