Gratuity Calculator India
Estimate your statutory gratuity entitlement for 5+ years of continuous service under the Payment of Gratuity Act, 1972. Incorporates the 15/26 working day formula and Section 10(10) tax-free exemption checks.
Employment & Wage Details
15/26 FormulaMost organized Indian companies with 10+ employees are legally covered under the Act.
✓ Exceeds 6 months: Automatically rounded UP to the next full year under statutory rules.
₹3,89,423
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Understanding Gratuity under the Payment of Gratuity Act, 1972
Statutory service tenure rules, the 15/26 working days formula, and tax exemptions.
The 15/26 Statutory Gratuity Formula
For organizations with 10 or more employees covered under the Payment of Gratuity Act, gratuity is computed using 15 days of wages per completed year of service, where a month is treated as 26 working days:
Gratuity = (15 × Last Basic + DA × Tenure) ÷ 26
Where:
• Last Basic + DA = Monthly Basic Salary + Dearness Allowance at time of leaving
• Tenure = Completed years of service (with >6 months rounded up to next year)
• 26 = Number of monthly working days (excluding 4 Sundays)
Worked Example: 7 Years 8 Months Service
An employee with last drawn monthly Basic + DA of ₹80,000 leaving after 7 years and 8 months:
Statutory Eligibility & Exemption Limits
An employee must complete at least 5 years of continuous service with an establishment to qualify for gratuity. The only statutory exceptions are permanent total disablement or death, where gratuity is paid regardless of tenure.
Under the Income Tax Act, the lifetime tax-free gratuity exemption ceiling for non-government private employees covered under the Act is ₹20,00,000. Any gratuity received beyond this limit is added to taxable income.
Frequently Asked Questions about Gratuity
Statutory employee benefits and retirement compensation rules.
When does an employee become eligible for Gratuity in India?
Why is 26 used as the denominator in the gratuity formula?
How are extra months treated in gratuity calculations?
Is gratuity completely tax-free in India?
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Learn why your in-hand salary is lower than your CTC. Clear breakdown of basic salary, HRA, employer EPF, gratuity, professional tax, and statutory TDS rules.
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