Gratuity Calculator
Calculate end-of-service gratuity benefits under Indian Payment of Gratuity Act
Calculate Your Gratuity
Basic salary for the last month worked
Additional compensation to cover inflation (optional)
Complete years of continuous service
Additional months (6+ months count as 1 year)
Gratuity Calculation Results
Service Period Analysis
Example Calculation
Sample Employee - Covered Under Act
Last Month's Salary: ₹50,000
Dearness Allowance: ₹10,000
Years of Service: 12 years 7 months
Employee Type: Covered (15/26 formula)
Calculation
Years for calculation: 13 (rounded up as months ≥ 6)
Gratuity = (₹50,000 + ₹10,000) × 13 × 15/26
Gratuity = ₹60,000 × 13 × 0.5769
Gratuity = ₹4,50,000
Eligibility Criteria
Service Period
Minimum 5 years of continuous service
Retirement
Employee is retiring from service
Superannuation
Eligible for superannuation benefits
Special Cases
Death or disablement due to accident
Key Information
Gratuity is paid by employer after retirement
Tax-free up to ₹20 lakh for covered employees
Months ≥ 6 are rounded up to next year
D.A. is additional compensation for inflation
Based on Indian Payment of Gratuity Act 1972
Understanding Gratuity Calculation
What is Gratuity?
Gratuity is a lump sum amount paid by an employer to an employee as a token of appreciation for services rendered. In India, it's governed by the Payment of Gratuity Act, 1972, and serves as an additional retirement benefit.
Payment of Gratuity Act
- •Enacted in 1972 for employee welfare
- •Applies to establishments with 10+ employees
- •Mandatory payment upon retirement/resignation
- •Maximum limit updated periodically by government
Calculation Formula
Covered Employees:
(Last Salary + D.A.) × Years × 15/26
Non-Covered Employees:
(Last Salary + D.A.) × Years × 15/30
Dearness Allowance (D.A.)
- Purpose: Compensation for inflation
- Based on: All India Consumer Price Index (AICPI)
- Paid to: Government employees and pensioners
- Countries: India, Bangladesh, Pakistan
Note: The 15/26 formula assumes 26 working days per month, while 15/30 uses 30 calendar days per month.