Financial Calculators
Gratuity Calculator
Fifteen days of salary for every year served. Estimate what your service has earned you.
- Monthly salary (basic + DA)
- ₹50,000
- Years of service
- 20
- Estimated gratuity
- ₹5,76,923
Uses the Payment of Gratuity Act formula: 15/26 x last drawn salary x completed years of service. A statutory ceiling applies to the tax-free amount; service rules for government and defence personnel differ, so confirm your specific entitlement.
A thank-you written into law
Gratuity is a statutory benefit paid on leaving after qualifying service, computed under the Payment of Gratuity Act as fifteen days of last drawn salary (basic plus DA) for every completed year, using a 26-day month. It typically arrives at retirement alongside other proceeds, and deserves a deployment plan rather than a parking spot.
Government and defence personnel are covered by their own service rules, where the computation and ceilings differ; treat this calculator as the general-formula estimate and confirm your specific entitlement.
The formula
Gratuity = (15 / 26) x last drawn monthly salary x completed years of serviceWorked example: a last drawn salary of Rs 50,000 (basic + DA) with 20 years of service works out to a gratuity of about Rs 5,76,923.
Frequently asked questions
Is gratuity taxable?
Gratuity enjoys tax exemption up to a statutory ceiling, with government employees getting fuller exemption. Amounts above the applicable limit are taxable; confirm current limits before planning.
When does gratuity become payable?
Generally after five years of continuous service, on retirement, resignation, or earlier in cases of death or disablement, where the five-year condition does not apply.
Do more than six months count as a full year?
Under the Act, service beyond six months in the final year is rounded up to a full year for the computation.
What should I do with the gratuity amount?
Park it safely first, then deploy it with a plan: income instruments for near-term needs, growth for the long term. Our retirement corpus guide covers exactly this.
Retirement proceeds deserve a plan.
Gratuity, commutation, DSOP: we help you deploy them into income and growth, calmly.