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What gratuity are you actually owed?

Gratuity isn't just a goodwill payment — it's a statutory entitlement with a specific formula and a tax-exempt ceiling. Work out both in seconds.

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Before you calculate

What is gratuity, and who's entitled to it?

Under the Payment of Gratuity Act, 1972, employees who complete 5 or more years of continuous service are entitled to a gratuity payment on leaving the organization — through resignation, retirement, or termination. The amount is calculated using a fixed formula, and the payout is exempt from tax up to a statutory ceiling of ₹20,00,000 under Section 10(10).

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Calculate your gratuity entitlement

Enter your last drawn salary and years of service — for help with an actual gratuity dispute or payout, book a consultation

Last drawn Basic + DA, monthly (₹)

Completed years of service

Estimated gratuity payable

₹ 2,76,923

Tax-exempt amount₹ 2,76,923

Taxable amount₹ 0

Eligible — 5+ years of service completed

Formula shown is for employees covered under the Payment of Gratuity Act, 1972: (Last drawn Basic+DA × 15 × years of service) / 26, exempt up to ₹20,00,000. Employees not covered under the Act use a different formula. Book a consultation to confirm your exact entitlement.

In plain language

Where the formula actually comes from

15 days' wages per year

For every completed year of service, you're entitled to 15 days of your last drawn Basic + DA.

26 working days a month

The formula assumes a 26-day working month (excluding weekly offs), which is why the divisor is 26, not 30.

Capped at ₹20 lakh, tax-free

Whatever the formula produces, only up to ₹20,00,000 of it is exempt from tax — any amount above that is taxable.

Questions

Frequently asked

01What if I've worked less than 5 years?

You generally aren't eligible for gratuity under the Act unless your service ends due to death or disability, in which case the 5-year requirement is waived entirely.

02How are partial years counted?

A common convention is that service of 6 months or more in the final year rounds up to a full year for the formula — though this can vary by employer policy and should be confirmed.

03Is gratuity always tax-free?

Only up to ₹20,00,000. If your formula-based entitlement (or what your employer actually pays) exceeds that, the excess is taxable as income.

04What if my employer isn't covered under the Payment of Gratuity Act?

A different formula applies — half a month's average salary (based on the last 10 months) for each completed year of service, still capped at the same ₹20 lakh exemption.

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Where to go next

Tax Planning & Advisory

Make sure a gratuity payout is factored into your overall tax picture for the year.

OngoingExplore Service

ITR-1 Return Filing

Report gratuity and other retirement benefits correctly when you file.

2–3 daysExplore Service

Business Support

Employers — get gratuity provisioning and payout compliance handled correctly.

OngoingExplore Service

Learn more

Vol. 01Gratuity Eligibility Explained: The 5-Year Rule and Its ExceptionsWhen the 5-year requirement doesn't apply, and how partial years are counted.Guide01 / 03 Vol. 02Gratuity for Employees Not Covered Under the ActThe different formula that applies, and who it affects.Guide02 / 03 Vol. 03Is Gratuity Received on Death Fully Tax-Free?Why the usual ₹20 lakh ceiling doesn't apply in this specific case.Guide03 / 03

Selected · Vol. 02

Gratuity for Employees Not Covered Under the Act — The different formula that applies, and who it affects.

Read article

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What gratuity are you actually owed?

What is gratuity, and who's entitled to it?

Calculate your gratuity entitlement

Where the formula actually comes from

15 days' wages per year

26 working days a month

Capped at ₹20 lakh, tax-free

Frequently asked

Where to go next

Tax Planning & Advisory

ITR-1 Return Filing

Business Support

Related articles

Let's figure out exactly what your situation needs.

Thank you — we've received your details.

What gratuity are you actually owed?

What is gratuity, and who's entitled to it?

Calculate your gratuity entitlement

Where the formula actually comes from

15 days' wages per year

26 working days a month

Capped at ₹20 lakh, tax-free

Frequently asked

Where to go next

Tax Planning & Advisory

ITR-1 Return Filing

Business Support

Related articles

Let's figure out exactly what your situation needs.

Thank you — we've received your details.