Gratuity Calculator (Indian Rules)
Determine your eligible gratuity payout according to the Payment of Gratuity Act, 1972, for covered and non-covered organizations.
Service & Salary Details
Calculation Summary
How to Use Gratuity Calculator
- Input your Last Drawn monthly Basic Salary + Dearness Allowance (DA).
- Enter your length of continuous service in completed Years and remaining Months.
- Select your organization category: 'Covered under Gratuity Act' (common for companies with 10+ employees) or 'Not Covered'.
- Inspect the eligibility indicator to see if you meet the continuous service threshold.
- View the calculated gratuity payout, formula explanation, and tax-exempt information.
Key Features & Privacy Guarantee
- Supports Covered Act (15/26 divisor) and Non-Covered Act (15/30 divisor) calculations.
- Applies the statutory nearest-year rounding rule automatically (e.g., 5.5 years rounds to 6 years for covered workers).
- Highlights the statutory 5-year eligibility conditions with interactive alerts.
- Displays detailed formulas, fractions, and intermediate calculations.
- References the ₹20 Lakhs tax exemption cap for private sector employees and the ₹25 Lakhs ceiling for government employees.
- Runs fully in-browser to protect your salary data.
Frequently Asked Questions
What is Gratuity in India?
Gratuity is a financial reward given by an employer to an employee for services rendered to the organization. It is a lump-sum amount paid upon retirement, resignation, or termination after completing at least five years of continuous service.
Is Gratuity taxable in India?
For government employees, gratuity is entirely tax-exempt (with a statutory payout limit of ₹25 Lakhs for central govt staff). For private-sector employees, gratuity is tax-exempt up to the least of: 1) Actual gratuity received, 2) The lifetime statutory limit of ₹20 Lakhs under Section 10(10) of the Income Tax Act, or 3) The calculated eligibility amount based on the Gratuity Act.
Does the 5-year eligibility rule apply in all cases?
No. The five-year continuous service clause is waived in the event of an employee's death or disablement due to accident or disease. In these cases, the employer must pay the gratuity even if the service length is less than five years.
What is the difference between Covered and Non-Covered establishments?
An establishment is 'Covered' if it employs 10 or more people on any day in the preceding 12 months. Covered workers receive 15 days of salary based on a 26-day month (formula divisor 26). Non-covered establishments are not mandated by the Act but can pay gratuity voluntarily, usually calculating 15 days of salary based on a 30-day month (formula divisor 30).