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End of Service Benefit

Gratuity Calculator

Work out the gratuity due to you under the Payment of Gratuity Act from your last drawn basic salary plus dearness allowance and your completed years of service, including the statutory ceiling. An educational planning tool, not legal, tax or financial advice.

Calculate your gratuity

Enter your last drawn monthly basic salary plus dearness allowance and how long you have served. Gratuity is normally payable once you complete five years of continuous service, and the calculation below assumes you are covered by the Payment of Gratuity Act.

Gratuity payable (illustrative)
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Payable Above the ceiling
Gratuity payable
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Service counted
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Before the ceiling
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This is an illustrative calculation based on your inputs only. For employees covered by the Payment of Gratuity Act the formula is fifteen days of last drawn salary for every completed year of service, taken as last drawn basic plus dearness allowance multiplied by fifteen, multiplied by years of service, divided by twenty six. A part year of six months or more counts as a full year and less than six months is ignored. The total is capped at the statutory ceiling, currently twenty lakh rupees, and gratuity up to that ceiling is exempt from income tax for covered employees. Establishments not covered by the Act use a twenty six day month replaced by thirty days and have no five year rule in the same form. Please confirm your own entitlement with your employer.

Planning what to do with the payout? Project it with the lumpsum calculator or the FD calculator.

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FAQ

Frequently Asked Questions

For an employee covered by the Payment of Gratuity Act, gratuity equals last drawn basic salary plus dearness allowance, multiplied by fifteen, multiplied by completed years of service, divided by twenty six. The twenty six stands for working days in a month and the fifteen for fifteen days of wages a year. A part year of six months or more is rounded up to a full year and anything less is ignored. The result is then capped at the statutory ceiling.
Ordinarily yes. Gratuity becomes payable once you complete five years of continuous service with the same employer, whether you resign, retire or are superannuated. The five year condition is waived if service ends because of death or disablement, in which case gratuity is payable to you or your nominee regardless of how long you served. Courts have also allowed a fifth year served for at least two hundred and forty days to count in some cases.
For employees covered by the Payment of Gratuity Act, gratuity is exempt from income tax up to the statutory ceiling, currently twenty lakh rupees, counted across your whole working life rather than per employer. Anything above that is taxable as salary. Government employees receive gratuity fully exempt. Because the ceiling is cumulative and has been revised over time, check your position with a tax professional before assuming the full amount is tax free.
The statutory ceiling under the Payment of Gratuity Act is currently twenty lakh rupees. If the formula gives a higher figure, the amount payable as statutory gratuity is limited to the ceiling, although an employer is free to pay more voluntarily or under a better contract, with the excess being taxable. This calculator shows both the uncapped figure and the amount after the ceiling so you can see the difference.
Gratuity must be paid within thirty days of it becoming payable, which is normally your last working day. If the employer delays beyond that, simple interest is payable on the amount for the period of delay. You can apply in Form I to your employer, and if payment is refused or delayed you may approach the controlling authority under the Act, usually the labour commissioner in your area.
No. AstroCapitalX is an educational Vedic astrology platform and is not a SEBI-registered investment advisor, a law firm or a tax practitioner. This gratuity calculator is a simplified illustration of the statutory formula and cannot account for your contract, your establishment coverage or any dispute. Please consult your employer, a qualified chartered accountant or an employment lawyer for your own case.