How much gratuity
are you owed?
Check if you’re eligible, calculate your exact gratuity amount, and understand what the formula actually means — in plain English.
Your Details
Enter your employment dates and salary to calculate.
Your gratuity calculation
Enter your joining date, last working day, and Basic+DA salary to see your gratuity amount and eligibility.
Gratuity Explained — Plain English
What Is Gratuity — and Do You Qualify?
Gratuity is a statutory benefit that every Indian employee earns simply by staying with the same employer for long enough. It is not a bonus, a gift, or at the company’s discretion — it is a legal entitlement under the Payment of Gratuity Act, 1972.
The Act applies to all factories, mines, oilfields, plantations, ports, railway companies, shops, and establishments with 10 or more employees. Once a company crosses this threshold, the Act applies permanently — even if the headcount later falls below 10.
To be eligible, you must have completed at least 5 years of continuous service with the same employer. This applies whether you resign, retire, are terminated, or leave due to death or permanent disability. The one exception is death or permanent disability — in those cases, gratuity is payable regardless of how long you have worked.
Minimum Service Required
5 continuous years with the same employer. For death or disability — no minimum applies.
Who Is Covered
All companies with 10+ employees across all industries — private, public, manufacturing, IT, retail.
Maximum Gratuity
₹20 Lakh — this is the statutory ceiling and also the tax-free limit for private sector employees.
Payment Deadline
Your employer must pay within 30 days of your last working day. Delays attract interest.
The Gratuity Formula — Step by Step
The formula for calculating gratuity in India is fixed by law and applies uniformly to all covered employees:
Identify your Basic + DA
Use your last drawn Basic Salary and Dearness Allowance. Do not include HRA, LTA, medical allowance, bonuses, or any other component. If your salary slip shows only Basic with no DA, use just the Basic figure.
Understand the 15/26 multiplier
15 represents half a month’s wages. 26 represents the number of working days in a month — calculated as 30 calendar days minus approximately 4 Sundays. Dividing 15 by 26 gives you roughly 0.577, meaning you earn just over half a day’s pay per working day for every year of service.
Count your years of service correctly
Full years are counted. If your remaining months after complete years total 6 or more, they round up to the next full year. If less than 6 months, those months are dropped. Example: 6 years and 8 months = 7 years. 6 years and 3 months = 6 years.
Apply the cap if needed
The maximum gratuity payable is ₹20 Lakh regardless of the formula result. If your calculated amount exceeds ₹20L, your entitlement is capped at ₹20L. Some employers voluntarily pay more — that excess is taxable.
Gratuity and Tax — What You Need to Know
For private sector employees, gratuity received up to ₹20 Lakh is fully exempt from income tax under Section 10(10) of the Income Tax Act. This ₹20L limit is a lifetime limit across all employers — if you receive gratuity from multiple employers over your career, the combined tax-free amount cannot exceed ₹20L.
For government employees, the entire gratuity amount is tax-exempt with no upper limit.
What If Your Employer Doesn’t Pay?
If your employer refuses to pay gratuity or delays beyond 30 days without reason, you have clear legal recourse. Under Section 7 of the Payment of Gratuity Act, you can file a formal complaint with the Controlling Authority — typically the Assistant Labour Commissioner of your district.
The process involves submitting a written application with your employment details, proof of service, and the calculated amount. The Controlling Authority will issue a notice to the employer and conduct a hearing. If the claim is upheld, the employer is directed to pay — along with interest for the delay period.
The 4 Years 240 Days Rule — Are You a Border Case?
The standard eligibility threshold is 5 complete years. However, the Supreme Court of India and several High Courts have held in multiple judgments that an employee who has completed 4 years and 240 days (approximately 4 years and 8 months) is deemed to have completed 5 years for the purpose of gratuity.
The logic is that a working year consists of 240 working days — so completing 240 days in the 5th year satisfies the annual requirement for that year. If you are in this window and your employer is disputing your eligibility, this is the legal precedent to cite — and the reason to consult a labour lawyer before you resign.
Frequently Asked Questions
This calculator is based on the Payment of Gratuity Act, 1972. Results are estimates only — actual gratuity may vary based on your specific employment contract, company policy, and applicable state laws. This page does not constitute legal or financial advice. For specific situations, consult a qualified labour lawyer or CA.