Calculate the gratuity payable to an employee under the Payment of Gratuity Act, 1972 — with 5-year eligibility check.
You are eligible for gratuity of ₹2,88,462.
Gratuity is a lump-sum retirement benefit payable under the Payment of Gratuity Act, 1972 to employees who complete 5+ years of continuous service (relaxed to <5 in case of death/disability). The formula is: Last drawn basic + DA × 15 × Years of service / 26. Employers with 10+ employees are covered; benefit is capped at ₹20 lakh tax-exempt as per Section 10(10) — anything above is taxed at slab.
For non-covered employees, the formula uses 30 days instead of 26. This calculator applies both formulae and shows the tax-exempt portion vs taxable excess, letting employees plan their exit and employers budget the liability.
Senior manager exits after 15 years at a covered establishment.
| Employee type | Formula | Tax-exempt limit |
|---|---|---|
| Government employee | N/A | Fully exempt |
| Covered by Gratuity Act | 15 × last salary × yrs / 26 | Min of formula / actual / ₹20 L |
| Not covered by Gratuity Act | 15 × avg 10-mo salary × yrs / 30 | Min of formula / actual / ₹20 L |
Resigning at 4 years 6 months — no gratuity (5-year rule strict except death).
Assuming ₹20 L cap is per employer — it's lifetime aggregate.
Confusing basic + DA (correct) with gross salary (incorrect) in the formula.
Need a CA to review your numbers? Book a free consult — we'll double-check within 24 hours.
Push resignation past 5-year mark — even one day matters (240 days = 1 year in final year).
Retain Form F (nomination) — critical for legal-heir claim.
Any employee who completes 5 years of continuous service in an establishment covered under the Act. The 5-year rule is waived on death/disability.
For covered employees, up to ₹20 lakh is exempt under Section 10(10). Excess is taxable.
Any employee who completes 5 years of continuous service in an establishment covered under the Act. The 5-year rule is waived on death/disability.
via Gratuity CalculatorFor covered employees, up to ₹20 lakh is exempt under Section 10(10). Excess is taxable.
via Gratuity CalculatorThe bonus / variable pay is shown separately since it is typically paid annually, not monthly.
via In-Hand Salary CalculatorThis dataset is free to reference in articles, research and reports. Attribution to Taxpex Consultancy is all we ask. Data last verified 31 July 2026.
Taxpex Consultancy. (2026). Gratuity Calculator — Taxpex. Retrieved from https://taxpex.com/tools/salary-payroll/gratuity-calculator<a href="https://taxpex.com/tools/salary-payroll/gratuity-calculator">Gratuity Calculator — Taxpex</a> — Taxpex Consultancy