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Gratuity Calculator

Calculate gratuity for private and government employees. Eligibility check and tax exemption rules.

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years
0 years50 years
months

If months > 6, years are rounded up for calculation

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Eligible for Gratuity

10 years of service (effective: 10 years)

Gratuity Amount

₹2,88,462

Formula Used

Gratuity = (50,000 × 15 × 10) / 26

= 75,00,000 / 26

= ₹2,88,462

Tax Exempt (up to ₹25L)

₹2,88,462

Taxable Amount

₹0

Key Facts about Gratuity

  • Eligibility: Minimum 5 years of continuous service required
  • Private Sector Formula: (Last Drawn Salary × 15 × Years of Service) / 26
  • Government Formula: (Last Drawn Salary × 15 × Years of Service) / 30
  • Rounding Rule: If months of service exceed 6, the year is rounded up
  • Tax Exemption: Gratuity up to ₹25,00,000 is exempt under Section 10(10) of the Income Tax Act
  • Payment of Gratuity Act, 1972: Applies to establishments with 10 or more employees

Gratuity formula as per Payment of Gratuity Act, 1972. Tax exemption limit ₹25,00,000 as per Section 10(10).

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Disclaimer: This calculator is for informational and educational purposes only.
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Frequently Asked Questions

What is gratuity and who is eligible?+
Gratuity is a lump-sum benefit paid by employers to employees who have completed at least 5 years of continuous service.
How is gratuity calculated?+
For employees covered under the Payment of Gratuity Act: Gratuity = (Last drawn salary x 15 x years of service) / 26. Last drawn salary includes basic pay and DA.
Is gratuity taxable in India?+
Gratuity up to Rs 20 lakh is exempt from income tax for employees covered under the Act. Any amount above this is taxable.