# Free Gratuity Calculator

> Calculate employee gratuity based on last drawn salary and years of service. Free, no sign-up, by Staff Khata.

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.

## Inputs

- Last Basic + DA Salary (₹/month)
- Years of Service
- Additional Months (beyond full years)
- Gratuity Act Coverage

## 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.

Use the calculator: https://staffkhata.com/free-tools/gratuity-calculator