Gratuity Calculator: Calculate Gratuity due, Tax-Free & Taxable Gratuity

A user-friendly tool to calculate gratuity for Indian employees based on years of service, last drawn salary (Basic + DA), and employee type. It provides a breakdown of gratuity payable, tax-free amount (up to ₹20 lakh for private and ₹25 lakh for government), and any taxable portion.

Gratuity Calculator Years of service completed: Death / Disability (overrides 4-y 8 months rule) Employee Type: Last drawn Basic Salary per month (₹): Last drawn Dearness Allowance per month (₹): Any gratuity already received from a previous job (₹):

Gratuity Payable: ₹ 0

Tax-Free Gratuity: ₹ 0

Taxable Gratuity: ₹ 0

Note on Death benefit: Gratuity is fully tax-free only on the death of the employee.

How to Use the Gratuity Calculator

This calculator is designed to help you estimate the gratuity payable to you based on the rules outlined in the Payment of Gratuity Act, 1972, for employees in India. It also calculates the tax-free and taxable portions of your gratuity.

Gratuity Rules: A Quick Guide

Gratuity is a lump-sum payment given by an employer to an employee as a sign of appreciation for long-term service, based on these rules:

Eligibility:
- An employee must have completed at least 4 years and 8 months of continuous service with the same employer to be eligible.
- This 5-year rule is waived in case of death or permanent disability; in such cases, gratuity is payable regardless of the length of service.
Calculation Formula:
- The gratuity amount is calculated based on your last drawn salary (Basic + Dearness Allowance) and your years of service.
- For companies covered under the Payment of Gratuity Act, 1972, the formula is: Last Drawn Salary times 15/26 times Years of Service (Here, 15 represents 15 days’ wages for each completed year, and 26 is the assumed number of working days in a month.)
- For companies not covered under the Act, the formula is: Last Drawn Salary times 15/30 times Years of Service
Taxation:
- Gratuity is tax-exempt up to a certain limit.
- For Government employees, the gratuity is fully exempt from tax up to ₹25 lakh.
- For Private employees, the gratuity is tax-exempt up to ₹20 lakh in a lifetime. If you’ve claimed gratuity in a previous job, that amount is deducted from this limit. Any amount above this remaining limit is considered taxable. Only if the gratuity is received upon death, then the entire amount is tax-free.

Using the Calculator

The calculator has six input fields and three output fields.

Inputs:

Years of service completed: Enter the number of full years you have worked. You can round up if you have worked for more than 6 months in a year; otherwise, you should round down.
Death / Disability: Tick this box if the reason for leaving service is death or disability. This overrides the 5-year service rule.
Employee Type: Use the drop-down menu to select whether you are a “Private Employee” or a “Government Employee.” This is crucial for determining the tax-free limit.
Last drawn Basic Salary per month: Enter your monthly basic salary.
Last drawn Dearness Allowance per month: Enter your monthly dearness allowance (DA).
Any gratuity already claimed: Enter any gratuity amount you have received from a previous employer or received as excess. This reduces your lifetime tax-free gratuity limit.

Outputs:

Gratuity payable today: This is the total gratuity amount you are entitled to based on your inputs and the rules.
Tax-free gratuity: This is the portion of your gratuity that is exempt from income tax.
Taxable gratuity: This is any amount that exceeds your eligible tax-free limit, which will be added to your taxable income for the year.

If more gratuity is paid than what the calculator shows, then it is similarly applied against your tax-free limit.

Click Calculate Gratuity to see your results.

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