How to use the Gratuity Calculator
- 1. Enter your payType your last drawn monthly basic + DA.
- 2. Add your serviceEnter completed years and extra months with this employer.
- 3. See the estimateGet your gratuity and how it would grow with more service.
How gratuity is calculated
For an employer covered by the Payment of Gratuity Act, the formula is gratuity = 15 ÷ 26 × last basic + DA × years of service. The 15 stands for 15 days of pay, and 26 is the working days counted in a month.
Part of a year counts as a full year if it is 6 months or more. So 10 years and 7 months counts as 11 years, while 10 years and 5 months counts as 10.
Example: last basic + DA of ₹60,000 and 10 years 7 months of service. Gratuity is ₹60,000 × 15 ÷ 26 × 11, which is ₹3,80,769.
If your employer is not covered by the Act, the common formula is half a month's pay for each completed year, which uses 15 ÷ 30 and ignores extra months. Choose No in the tool to see that version.
What to check about your gratuity
- Five-year rule. Gratuity usually needs 5 years of continuous service. It can be paid sooner in cases such as death or disablement. The tool warns you if your service is shorter.
- Limit. The ₹20,00,000 limit in the tool is an assumption to verify. It is an editable box, and an employer may choose to pay more.
- Labour codes. New labour codes change some gratuity rules, including for fixed-term staff and how wages are defined. Ask HR how yours is worked out.
- Tax. Tax treatment differs for government and private staff, and depends on the limit that applies to you.
The table in the result shows your estimate at 5, 10, 15 and more years at today's pay, which helps when you are weighing up a job change. Planning your exit? The notice period calculator gives your last working day. Build the rest of your retirement picture with the EPF calculator and NPS calculator. This is an estimate, not tax advice.
Frequently asked questions
Why divide by 26?
The Act treats a month as 26 working days, so 15 days of pay is 15 ÷ 26 of monthly pay.
Do 6 months count as a full year?
Yes, for an employer covered by the Act. Under 6 months is dropped. For an employer not covered, only completed years count.
Will I get gratuity under 5 years?
Usually not, except in cases such as death or disablement. The labour codes also change this for some fixed-term staff, so check with HR.
Is this tax advice?
No. This is an estimate, not tax advice. Verify the current rules or ask a tax professional before you decide.
Is this tool free?
Yes. It is free, and we ask for your name and WhatsApp number once when you view your result. All other Uncodemy tools then open without the form.