What is a gratuity calculator?
A gratuity calculator estimates the lump sum an employee may receive under the Payment of Gratuity Act when leaving an organisation after qualifying service. Gratuity is based on last drawn basic salary plus dearness allowance (DA) and completed years of service.
The tool applies the statutory formula G = n × b × 15/26 and caps the result at ₹10 lakh. Amounts above the cap are ex gratia payments at the employer's discretion—not modeled here.
How can a gratuity calculator help you?
Your offer letter rarely spells out the exact gratuity cheque at exit. Plugging in tenure and last drawn basic + DA gives a number you can plan around when switching jobs or retiring.
- Estimate gratuity before resignation or retirement.
- See how an extra six months of service can round up eligible years.
- Check whether your calculated amount hits the ₹10 lakh statutory ceiling.
How does this gratuity calculator work?
Under the Payment of Gratuity Act formula: multiply eligible years of service by last drawn monthly basic + DA, then apply the factor 15/26. If you have six or more additional months beyond full years, service is rounded up to the next whole year (for example, 17 years 6 months counts as 18 years).
G = n × b × 15/26
Where –
| G | Gratuity amount (capped at ₹10,00,000) |
|---|---|
| n | Eligible years of service (rounded) |
| b | Last drawn basic salary + DA per month |
Example: 5 years, ₹30,000 basic + DA → G = 5 × 30,000 × 15/26 ≈ ₹86,538
Worked example
If you worked for 5 years and your last drawn basic + DA was ₹30,000 per month, gratuity equals 5 × 30,000 × 15/26, which is about ₹86,538.
With 17 years and 6 months of service at the same salary, eligible years round to 18, giving roughly ₹3,11,538 before any cap is applied.
How to use this gratuity calculator
Enter completed years of service, any additional months, and last drawn monthly basic + DA. Results show eligible years and the gratuity amount after the ₹10 lakh statutory limit.
Compare retirement benefits with the EPF calculator or estimate loan EMIs on your post-exit budget using the EMI calculator.
What this calculator does not include
Ex gratia payments above ₹10 lakh, different rules for daily-wage or seasonal workers, death/disablement provisions, and tax treatment of gratuity under Section 10(10) are not modeled. Eligibility assumes standard continuous service of at least five years under the Act.
Frequently asked questions
What is the maximum gratuity payable under law?
Statutory gratuity under the Payment of Gratuity Act is capped at ₹10 lakh. Any amount above that is an ex gratia payment and depends on employer policy.
How are partial years of service counted?
If you have served six months or more beyond completed years, the tenure is rounded up to the next full year. For example, 17 years and 6 months is treated as 18 years.
Which salary components are used for gratuity?
Gratuity is calculated on last drawn basic salary plus dearness allowance (DA). Allowances such as HRA, bonuses, and commissions are generally excluded unless your employer's policy states otherwise.