Free Gratuity Calculator
Calculate employee gratuity based on last drawn salary and years of service.
Quick answer
Gratuity = 15 × last drawn (Basic + DA) × completed years of service ÷ 26. Service of more than 6 months in the final year counts as a full year. Example: ₹40,000 Basic + DA and 10 years gives 15 × 40,000 × 10 ÷ 26 = ₹2,30,769. Gratuity is tax-free up to ₹20 lakh for employees covered by the Payment of Gratuity Act.
Last reviewed November 2026.
How to use the Gratuity Calculator
Fill in these fields and the gratuity calculator works out the rest instantly, in your browser:
- Last Basic + DA Salary (₹/month)
- Years of Service
- Additional Months (beyond full years) — If ≥ 6 months, rounds up by 1 year
- Gratuity Act Coverage (Covered under Payment of Gratuity Act / Not Covered)
Worked example
With Last Basic + DA Salary: 60000; Years of Service: 10; Additional Months: 6; Gratuity Act Coverage: Covered under Payment of Gratuity Act:
| Basic + DA (Monthly) | ₹60,000 |
| Total Service Years (Rounded) | 11 years |
| Formula Used | Basic × 15 / 26 × Years |
| Calculated Gratuity | ₹3,80,769 |
| Tax-Free Limit | ₹20,00,000 |
| Payable Gratuity | ₹3,80,769 |
Entire gratuity amount is tax-free as it is within ₹20 Lakh limit.
Frequently asked questions
Who is eligible for gratuity?
Employees with at least 5 years of continuous service in an establishment with 10 or more employees. The 5-year condition does not apply on death or disablement. Under the Code on Social Security, fixed-term employees qualify after one year of service.
Why divide by 26 in the gratuity formula?
The Act treats a month as 26 working days, so 15 days' wages = monthly wage × 15 ÷ 26. Employers not covered by the Act often use 30 instead, which gives a lower amount.
What is the maximum gratuity amount?
The tax-free ceiling is ₹20 lakh. An employer may pay more, but the amount above ₹20 lakh is taxable.
Calculators
Indian payroll & tax calculators with real formulas · 41 tools
Generators
Professional letters, slips & HR documents · 10 tools
Templates
Print-ready forms & downloadable templates · 6 tools
Safety & Ops
Workplace safety checklists & incident forms · 8 tools
HR Docs
HR policies, checklists & compliance docs · 9 tools
Ready to Automate Your HR?
These free tools are just the beginning. StaffKhata's full HRMS automates payroll, attendance, compliance and more — saving you hours every week.