Gratuity Calculator India 2026 — Payment of Gratuity Act

🎖️ Gratuity Details

Last Drawn Salary (Basic + DA)

₹

Monthly Basic Salary + Dearness Allowance

Years of Service

yrs

Minimum 5 years required for gratuity eligibility.

📐 Gratuity Formula

Gratuity = (Salary × 15/26) × Years
15 days salary per completed year of service. 26 = working days/month.

🛡️ Tax-Free Limit

Gratuity up to ₹20 lakh is completely tax-free for employees covered under the Gratuity Act.

Gratuity Amount

^₹0

Tax-Free Amount ₹0

Taxable Gratuity ₹0

Per Year Earned ₹0

Calculation Breakdown:

Daily wage (Salary ÷ 26)

15 days × daily wage

× Years of service

💡 Smart Insights

Gratuity Calculator — Payment of Gratuity Act India 2026

Gratuity is a lump sum payment made by an employer to an employee as a token of appreciation for the services rendered. Under the Payment of Gratuity Act, 1972, employees who have completed at least 5 years of continuous service are entitled to gratuity.

Gratuity Formula

The standard formula for calculating gratuity is: Gratuity = (Last Drawn Salary × 15/26) × Years of Service. Here, Last Drawn Salary = Basic Salary + Dearness Allowance, 15 represents 15 days of salary per year, and 26 represents the working days in a month.

Gratuity Tax Rules (2026)

Gratuity up to ₹20 lakhs is completely tax-free for employees covered under the Gratuity Act.

For employees not covered under the Act, the tax-free limit is the least of: actual gratuity received, ₹20 lakhs, or half month's average salary for each year of service.

Gratuity above ₹20 lakhs is taxable as income in the year of receipt.

Government employees receive full gratuity tax-free without any limit.

Who is Eligible for Gratuity?

Any employee who has worked continuously for 5 or more years with the same employer is eligible for gratuity. This applies to all types of employment including full-time, contractual, and even death or disability (where the 5-year rule may be waived).