Gratuity Calculator for India
Estimate the gratuity that may be payable to you, eligibility and potential tax exemptions under India’s current labour-code rules.
What You Will See
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The statutory wage used for the estimate
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The service period used in the formula
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Gratuity before the statutory ceiling
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Estimated statutory gratuity payable
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An eligibility indication
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An optional tax-exemption estimate
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The formula and assumptions used
Calculate Your Gratuity
Enter your employment, service and wage details.
employment Details
Enter completed years and additional completed months. For regular employment, only a period exceeding six months is rounded up.
Wage Used for Gratuity
Use the wage figure applicable under the Code on Social Security—not automatically total CTC, take-home pay or only Basic + DA.
Exclude annual performance incentives, ESOPs, variable performance pay, reimbursements, gratuity and retrenchment compensation.
Before you begin
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Enter completed service only.
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Exactly six additional months does not round up.
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Do not enter take-home salary.
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Government employees follow separate DCRG rules.
Current Rule
The calculator uses the current statutory wage framework and the 15/26 formula for qualifying monthly-rated, non-government employees.
Not sure if your employer is covered?
Use the conditional estimate, but confirm establishment coverage with your HR or payroll team before relying on the result.
Optional - requires additional tax-related information
Leave blank to use the calculator’s estimated statutory payment. Enter a higher employer-policy or contractual payment only if known.
Use Basic plus the Dearness Allowance that qualifies under the income-tax gratuity rules. This can differ from the statutory wage used to calculate gratuity.
Government Employee / DCRG
Government employees generally receive gratuity or DCRG under the pension or service rules applicable to their employment, not the private-sector formula used by this calculator.
The amount can vary by government, service and applicable pension rules. Please check with your department’s pension cell for the applicable calculations.
Employer not covered
This calculator does not treat the non-covered half-month salary formula as a statutory employer-payment obligation.
Where the gratuity chapter does not apply, any payment may depend on your employment contract, employer policy, award or other arrangement. Ask your employer for the governing gratuity policy.
The separate half-month average-salary formula may still be relevant when calculating income-tax exemption on gratuity actually received, but it does not by itself establish that your employer must pay that amount.
Error text
Your Gratuity Estimate
Conditional estimate - assumes your employer is covered
Primary Result
Estimated statutory gratuity
Estimated statutory gratuity
Result type / conditional status
Eligibility
Eligibility status
Eligibility explanation
Statutory wage used
Statutory wage used
Service factor
Service factor
Formula amount
Formula amount before ceiling
Formula used
Formula explanation
Ceiling note
Tax Estimate
Potentially exempt
Estimated exempt amount
Potentially taxable
Estimated taxable amount
Tax calculation basis
Email this Result
Receive the calculation, assumptions and important limitations.
Email Success Text
How Is Gratuity Calculated? Gratuity Calculation Formula
This gratuity calculation formula is designed for qualifying monthly-rated, non-government employees. The calculator uses the 15/26 formula and shows the service factor, statutory wage and ceiling assumptions used in the result.
For a monthly-rated employee, the current statutory formula is:
Gratuity = Last drawn statutory monthly wage × 15 ÷ 26 × service factor
For regular employees, each completed year is counted. A remaining period exceeding six months is counted as an additional year. Exactly six months does not round up.
Fixed-term employees whose contracts expire and deceased employees are treated on a proportionate-service basis.
The statutory payment is subject to the ceiling currently notified by the Central Government. Better terms under an award, agreement, contract or employer policy may still apply.
What Counts as Wages for Gratuity?
Statutory wages ordinarily include:
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Basic pay
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Dearness allowance
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Retaining allowance, where applicable
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Any amount that must be added back under the 50% allowance rule
Where specified allowances and payments excluded from wages exceed 50% of total remuneration, the excess is added back to statutory wages.
Annual performance incentives, ESOPs, variable performance components and reimbursement-based payments are generally not included merely because they form part of total compensation.
Do not enter your full CTC unless it is genuinely the statutory wage figure used by your employer.
Gratuity Eligibility: Am I Eligible for Gratuity?
This acts as a gratuity eligibility calculator, but it does not replace your employer’s payroll records, HR policy or legal review.
The standard rule requires at least five years of continuous service for resignation, retirement or superannuation.
The five-year condition does not apply where employment ends because of:
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Death
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Disablement
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Expiry of qualifying fixed-term employment
A fixed-term employee is currently eligible on completing one year under the contract.
Continuous-service rules can depend on days actually worked, interruptions in service and employment records. The calculator therefore provides an indication rather than a binding eligibility determination.
Is Gratuity Taxable?
Government gratuity covered by the relevant government pension rules is generally fully exempt.
For an eligible non-government employee, the exempt amount is generally the lowest of:
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The amount actually received
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The applicable formula-based tax exemption
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The unused portion of the ₹20 lakh lifetime exemption limit
Any gratuity exemption used with an earlier employer reduces the remaining lifetime limit.
The tax calculation uses its own statutory salary definition and may not equal the wage figure used to calculate the employer’s gratuity obligation.
DCRG Calculation for Government Employees
Government employees generally receive Death-cum-Retirement Gratuity under applicable pension or service rules rather than the private-sector calculation used here.
Central, state, local-authority and other government arrangements can differ. This calculator therefore does not produce a DCRG amount. Refer to your department’s pension cell and the rules applicable to your service.
Common Gratuity Mistakes
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Entering total CTC as statutory wages
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Assuming statutory wages always mean Basic + DA only
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Rounding exactly six additional months up to another year
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Treating the non-covered tax formula as a statutory payment entitlement
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Ignoring the ₹20 lakh statutory ceiling
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Ignoring gratuity exemptions used with earlier employers
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Assuming every employee must complete five years
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Applying the private-sector formula to government DCRG
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Assuming the calculator overrides better contractual or employer-policy terms
What Should You Do With Your Gratuity?
Gratuity is often one of the largest lump sums received at retirement or during a career transition. Before spending or investing it, consider:
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Emergency reserves
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Near-term cash requirements
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Outstanding high-cost debt
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Retirement income needs
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Asset allocation
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Tax implications
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Other financial goals
Avoid committing the entire amount until you understand how it affects your broader financial plan.
Worked Examples
Example 1: Below the ceiling
An eligible employee has a statutory monthly wage of ₹60,000 and 12 years and 8 months of service.
Because the additional service exceeds six months, the service factor becomes 13 years.
Gratuity before the ceiling:
₹60,000 × 15 ÷ 26 × 13 = ₹4,50,000
The formula amount is below the current ₹20 lakh statutory ceiling.
Example 2: Formula exceeds the ceiling
An eligible employee has a statutory monthly wage of ₹1,50,000 and 27 years and 7 months of service.
Because the additional service exceeds six months, the service factor becomes 28 years.
Formula amount:
₹1,50,000 × 15 ÷ 26 × 28 = ₹24,23,077
The formula amount exceeds the current ₹20 lakh statutory payment ceiling, so the calculator shows estimated statutory gratuity of ₹20,00,000.
A contract, award, agreement or employer policy may provide better terms. Where the employee actually receives more than the statutory amount, the tax-exemption calculation must separately consider the amount received, the applicable tax formula and the unused lifetime exemption.
Frequently Asked Questions
What is gratuity?
Gratuity is a lump-sum employment benefit payable in qualifying circumstances in recognition of continuous service. The current statutory framework is contained in the Code on Social Security, 2020.
What is the current gratuity formula?
For a monthly-rated employee, the formula is last drawn statutory monthly wage × 15 ÷ 26 × the applicable service factor. A part-year exceeding six months normally counts as another year, while fixed-term expiry and death cases are calculated proportionately.
Does exactly six additional months round up?
No. The current provision uses the words “in excess of six months.” Exactly six months does not round up; more than six months does.
Does gratuity still use only Basic + DA?
Not necessarily. Current statutory wages include Basic, Dearness Allowance and retaining allowance, where applicable. Certain excluded allowances can be added back when they exceed 50% of total remuneration.
Am I eligible if I resign?
The standard rule requires at least five years of continuous service for resignation. Continuous-service provisions can depend on actual days worked and employment records, so borderline cases should be checked with HR or a legal professional.
Do fixed-term employees need five years?
No. Current official guidance states that a fixed-term employee becomes eligible after completing one year under the contract. Gratuity on qualifying contract expiry is calculated proportionately.
Is gratuity taxable?
Government gratuity covered by the relevant pension rules is generally fully exempt. For non-government employees, the exemption is generally the lowest of the amount received, the applicable formula amount and the unused portion of the ₹20 lakh lifetime exemption.
Does the calculator calculate government DCRG?
No. Government DCRG follows separate pension or service rules that can vary by government and service. Government employees should check with their department’s pension cell.
When must gratuity be paid?
The Code provides that an employer should arrange payment within 30 days from the date gratuity becomes payable. Delayed payment can attract interest, subject to the statutory conditions.
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Important Legal Update
India’s gratuity framework now operates under the Code on Social Security, 2020. The revised statutory definition of wages applies to gratuity calculations from 21 November 2025.
Your statutory wage may therefore differ from both your total CTC and the Basic + DA figure shown on your payslip.
Important Information
This calculator is provided for educational and illustrative purposes. It does not constitute legal advice, tax advice, employment advice, investment advice or a determination of entitlement.
Actual gratuity depends on the applicable law, employment category, establishment coverage, payroll records, continuity of service, employment terms, employer policy and any better contractual entitlement.
Tax treatment depends on the law applicable when gratuity is received and on exemptions previously claimed. Consult your employer, payroll team, tax adviser or legal adviser where necessary.
Last reviewed: June 2026