Calculate your gratuity amount as per Payment of Gratuity Act 1972. Free online calculator for employees with 5+ years of continuous service.
Enter your last drawn basic salary plus Dearness Allowance (DA)
Total years of continuous service with your employer
Gratuity = (Years of Service × Monthly Salary × 15) ÷ 26
For employees covered under the Payment of Gratuity Act 1972 (organizations with 10+ employees)
Note: Maximum gratuity cap is ₹20 lakh as per latest amendments. Partial years are rounded to nearest full year.
Quickly calculate your gratuity amount without manual calculations. Get accurate results in seconds based on the official formula prescribed by Payment of Gratuity Act 1972.
Plan your retirement corpus effectively by knowing your expected gratuity amount. Factor this into your overall retirement planning for a comfortable post-retirement life.
Cross-check the gratuity amount offered by your employer during resignation or retirement. Ensure you receive the correct amount as per legal provisions.
Calculator follows the Payment of Gratuity Act 1972 formula. Includes the latest maximum cap of ₹20 lakh and ensures calculations comply with current labor laws.
Understand the financial impact of job changes. Calculate how much gratuity you'll lose if you switch jobs before completing full years of service.
Know your tax-exempt gratuity limit in advance. Plan your finances better with knowledge of tax-free retirement benefits under Section 10(10) of Income Tax Act.
💡 Pro Tip: Gratuity is tax-exempt up to ₹20 lakh for private sector employees. Any amount above this is taxable as salary income!
Gratuity is a lump sum payment made by employers to employees as a token of appreciation for services rendered. You're eligible if you've completed 5 years of continuous service (or earlier in case of death/disability). Governed by Payment of Gratuity Act 1972 for organizations with 10+ employees.
Formula: (Years of Service × Last Drawn Salary × 15) ÷ 26. Last drawn salary includes Basic + DA only (not HRA, allowances, or bonus). For example, 10 years service with ₹50,000 salary = (10 × 50,000 × 15) ÷ 26 = ₹2,88,462 gratuity.
The maximum gratuity limit is ₹20 lakh as per the latest amendment (increased from ₹10 lakh in 2010). Any gratuity amount exceeding this limit is considered "ex gratia" payment and is fully taxable. This cap applies to private sector employees only.
Tax exemption under Section 10(10): Government employees get full exemption. Private sector employees get exemption up to ₹20 lakh or actual gratuity received, whichever is lower. Amount above ₹20 lakh is taxable as salary. For non-covered employees, minimum of actual, ₹20L, or 15 days salary × years worked is exempt.
Generally no. Minimum 5 years of continuous service is mandatory for gratuity eligibility. However, exceptions exist for: Death, disability/accident causing termination, or contractual agreements providing gratuity for shorter tenure. Some companies offer ex-gratia payments voluntarily.
Partial years are rounded to nearest full year. If you worked 6 months or more in a year, it counts as 1 full year. Less than 6 months is ignored. For example, 10 years 7 months = 11 years for gratuity calculation. 10 years 4 months = 10 years only.
Gratuity must be paid within 30 days of becoming due (resignation, retirement, death, or disablement). If delayed beyond 30 days, employer must pay interest @ 10% p.a. Employee can file complaint with Controlling Authority if payment is delayed or disputed.
Yes, significantly. You lose gratuity if you resign before 5 years. Service period doesn't carry forward to new employer. If you've completed 5+ years, you get gratuity from current employer when leaving. To maximize gratuity, complete major milestones (5, 10, 15, 20 years) before job changes.
Yes, in certain cases. Employer can forfeit gratuity for: Termination due to moral turpitude, willful omission/negligence causing loss, riotous/violent behavior, or if employment is terminated for any act causing damage. Gratuity can be forfeited fully or partially based on severity.
Required documents: Application Form I (for claim), resignation/retirement letter, relieving letter, Form F (if applicable), ID proof, bank details, and PAN card. For death cases, nominee/legal heir needs death certificate, succession certificate, and identification documents. Keep salary slips as proof of Basic + DA.
Complete full years before resigning: If you're close to completing another full year (say 9 years 8 months), wait to complete 10 years. The difference in gratuity between 9 and 10 years can be significant - approximately 11% more gratuity for that extra year.
Understand what salary components count: Only Basic salary + Dearness Allowance (DA) are used for gratuity calculation. HRA, conveyance, medical allowance, bonuses, and commissions are NOT included. Negotiate for higher basic pay rather than allowances if you plan long tenure.
Keep employment records safe: Maintain copies of appointment letter, salary slips (especially last drawn), increment letters, and relieving documents. These are crucial if there's any dispute about gratuity calculation or entitlement.
File Form I promptly: Submit gratuity claim form (Form I) to your employer within prescribed time. Don't delay - employer has 30 days to pay from date of eligibility. Keep acknowledgment copy for records. Follow up if payment is delayed beyond 30 days.
Nominate beneficiaries: Fill nomination form (Form F) at the time of joining or within prescribed time. Specify who should receive gratuity in case of your death. You can change nominees by submitting fresh Form F. Without nomination, legal heirs face lengthy claim procedures.
Factor gratuity into retirement planning: For a 30-year career with final salary of ₹1 lakh (Basic + DA), you could get ₹17.3 lakh gratuity tax-free. This is a substantial retirement corpus - plan how to invest it wisely for post-retirement income.
Know your rights during disputes: If employer refuses gratuity or calculates incorrectly, approach Controlling Authority under Gratuity Act within prescribed time. Authority can order payment with interest @ 10% p.a. for delayed payment. Legal remedy is available - don't let employers deny rightful gratuity.
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