What is a Gratuity Calculator?
A gratuity calculator estimates the gratuity your employer will pay when you resign, retire or leave a job, based on your last drawn basic salary + DA and your years of service. It also shows how much of the amount is tax-free.
The calculator reflects the new labour codes in force from 21 November 2025, under which fixed-term employees become eligible after just one year of service.
How to use the Gratuity Calculator
- 1Enter your last drawn monthly basic salary + DA.
- 2Enter your years of service and any additional months.
- 3Choose whether your employer is covered under the gratuity law (most employers with 10 or more employees are).
- 4Read your gratuity amount and the tax-free portion.
Gratuity Calculation Formula
- Salary
- — Monthly basic salary + dearness allowance
- 15 ÷ 26
- — 15 days' wages, with 26 working days in a month
- Not covered
- — Salary × 15 × completed years ÷ 30
Example: ₹50,000 monthly salary, 10 years 7 months of service
| Service counted | 11 years (7 months rounds up) |
|---|---|
| Gratuity | ₹3,17,308 |
| Tax-free portion | ₹3,17,308 (within ₹20 lakh limit) |
Gratuity eligibility
- Permanent employees — after 5 years of continuous service.
- Fixed-term employees — after 1 year, under the new labour codes.
- Death or disablement — gratuity is payable regardless of years of service.
- Employers must pay gratuity within 30 days, or pay interest on the delay.
Tax on gratuity
Gratuity received by government employees is fully tax-free. For private-sector employees, up to ₹20 lakh over your lifetime is exempt; anything above that is taxed at your slab rate. The new labour codes also require basic pay to be at least 50% of total pay, which can raise the salary used to calculate gratuity.
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Results from this calculator are estimates based on the inputs and assumptions you enter. They are for information and education only and are not financial, tax or investment advice.