Knowledge Base

Gratuity Calculator

Gratuity = (Last Salary × 15 × Years) / 26

Eligible after 5 years of continuous service with an employer.

Tax-free up to ₹20 Lakhs (for private sector employees).

"Last drawn salary" = Basic + DA at the time of exit.

Applies to companies with 10+ employees under the Gratuity Act, 1972.

For every year of service, you get ~15 days of salary as gratuity.

Pro Tip

Gratuity is calculated on completed years + months (rounded). 4 years 7 months = 5 years. Exit timing matters!

Gratuity Calculator - Complete Guide

Everything you need to know about Gratuity Calculator and how to optimize your financial strategy.

Understanding the Formula

The core calculation is based on:

Gratuity = (Last Salary × 15 × Years) / 26

Key Concepts & Rules

Eligible after 5 years of continuous service with an employer.

Tax-free up to ₹20 Lakhs (for private sector employees).

"Last drawn salary" = Basic + DA at the time of exit.

Applies to companies with 10+ employees under the Gratuity Act, 1972.

For every year of service, you get ~15 days of salary as gratuity.

Expert Strategy

Gratuity is calculated on completed years + months (rounded). 4 years 7 months = 5 years. Exit timing matters!

How to use this Calculator?

1. Enter your specific values in the input fields above.
2. The calculator will render instant results as you type.
3. Check the breakdown table for year-by-year projections.
4. Adjust the inputs to see how different scenarios impact the final result.