Calculate your gratuity payout under the Payment of Gratuity Act 1972
This calculator is for educational purposes only. Actual gratuity may vary based on rounding of service years. Consult an HR professional for official calculations.
For employees covered under the Payment of Gratuity Act: Gratuity = (Last Salary × 15 × Years of Service) ÷ 26. The divisor 26 represents working days in a month. For employees not covered under the Act: Gratuity = (Last Salary × 15 × Years of Service) ÷ 30. The maximum gratuity payable is capped at ₹20 lakhs.
Gratuity received by government employees is fully tax-exempt. For private sector employees covered under the Gratuity Act, the least of the following is tax-exempt: (1) actual gratuity received, (2) ₹20 lakhs, or (3) the gratuity calculated as per formula. Any amount above the exemption limit is added to your taxable income and taxed as per your income slab.
Under the Payment of Gratuity Act 1972, you are not legally entitled to gratuity if you leave before completing 5 continuous years of service. However, some employers voluntarily pay a proportionate amount as ex-gratia. There are exceptions — if employment ends due to death or disability, gratuity is payable even if 5 years have not been completed.