What is the formula for gratuity in India?

Gratuity = (15 ÷ 26) × last drawn basic salary × years of service. The 26 represents working days in a month; 15 represents 15 days per year. Each completed year of service (6+ months counts as 1 year) counts toward the calculation.

Who is eligible for gratuity?

Employees who have completed at least 5 years of continuous service with the same employer. On retirement, resignation, or death/disability. In case of death or disability, the 5-year condition is waived.

Government employees: fully exempt. Private employees under Gratuity Act: exempt up to Rs 20 lakh. Private employees not under Act: exempt up to the least of: 15 days salary per year, half month's average salary per year, or Rs 20 lakh.

India Gratuity Calculator (Payment of Gratuity Act)

Calculate gratuity entitlement under the Payment of Gratuity Act 1972. Formula: (15 ÷ 26) × last drawn salary × years of service. Maximum: Rs 20 lakh. Taxable gratuity above Rs 20 lakh. Forfeiture rules for misconduct.

Principal ($)

Annual Rate (%)

Years

Compounding / Year

$ Finance Disclaimer: These calculators are for educational and illustrative purposes only. Results do not constitute financial advice. Consult a licensed financial advisor before making investment or borrowing decisions.

How to Use

Enter the values for the scenario you are assessing. Calculate gratuity entitlement under the Payment of Gratuity Act 1972. Formula: (15 ÷ 26) × last drawn salary × years of service. Maximum: Rs 20 lakh. Taxable gratuity above Rs 20 lakh. Forfeiture rules for misconduct. Use the india gratuity calculator result to inform your calculation.

Related Calculators

India EPF Maturity Calculator

Finance & Accounting

India Income Tax Old vs New

Finance & Accounting

India NPS Calculator

Finance & Accounting

India Gratuity Calculator (Payment of Gratuity Act)

How to Use

Related Calculators

Frequently Asked Questions

What is the formula for gratuity in India?

Who is eligible for gratuity?

Is gratuity taxable?