Gratuity Calculator: Amount & Tax-Free Limit

Work out the gratuity your employer owes you and how much of it is tax-free.

Gratuity Calculator

Estimate the gratuity you will receive when you leave or retire, and how much of it is tax-free.

Estimated gratuity₹2,88,462₹2.88 lakh

Tax-free part: ₹2,88,462₹2.88 lakh
Taxable part: ₹0
Years counted: 10
Gratuity per year of service: ₹28,846

Results are estimates for educational purposes only and are not financial, tax or legal advice. For more details, do consult a lawyer or a subject-matter expert.

Tax-free vs taxable gratuity

Tax-freeTaxable

View chart data as a table

Tax-free vs taxable gratuity
Tax-free	₹2,88,462
Taxable	₹0

Explain this result

Gratuity = last drawn basic + DA × 15 ÷ 26 × years of service.

Here: salary × 15 ÷ 26 = ₹28,846 for each year, × 10 years = ₹2,88,462.

If your employer is covered by gratuity law (now the Code on Social Security, 2020, which replaced the Payment of Gratuity Act from 21 November 2025), a final part-year of more than 6 months counts as a full year and a month is taken as 26 working days. Otherwise only completed years count and a month is 30 days.

Up to ₹20,00,000 is tax-free for private-sector employees; government employees' gratuity is fully exempt.

Frequently asked questions

How is gratuity calculated?

For employers covered by gratuity law (the Code on Social Security, 2020, earlier the Payment of Gratuity Act): last drawn basic + DA × 15 ÷ 26 × years of service. For others: × 15 ÷ 30 × completed years.

Do I get gratuity if I resign before 5 years?

Usually not, except on death or disablement. Some courts have treated 4 years and 240 days as 5 years, and fixed-term employees may have different rules under the new labour codes.

Is gratuity taxable?

For private-sector employees, gratuity up to the government ceiling is tax-free; anything above is taxed as salary.

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<p style="font-size:13px"><a href="https://sumsense.in/calculators/gratuity-calculator/">Gratuity Calculator</a> – Free calculator by SumSense</p>
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Formula

For employees covered by the law: Gratuity = 15 × last drawn salary (basic + DA) × years of service ÷ 26.

Worked example

Last drawn basic + DA of ₹50,000 and 10 years of service: 15 × 50,000 × 10 ÷ 26 = ₹2,88,462.

Good to know

Gratuity rules changed with the Labour Codes. The calculator applies the rules for the year you select – check the service period that applies to you.
Gratuity is tax-free up to a ceiling; anything above is taxed at your slab rate.
If your employer refuses to pay, you can approach the Controlling Authority. Get legal help.