Question 1

How is gratuity calculated in India?

Accepted Answer

For employees covered under the Payment of Gratuity Act, 1972, gratuity = (15 × last drawn salary × years of service) ÷ 26, where salary means Basic + Dearness Allowance. For employees not covered, the divisor is 30 and only completed years count. Gratuity is capped at ₹20 lakh.

Question 2

What is the eligibility for gratuity?

Accepted Answer

You generally need a minimum of 5 years of continuous service with the same employer to be eligible for gratuity. The 5-year condition is waived if service ends due to death or disablement. Below 5 years, no gratuity is payable.

Question 3

How are the months of service rounded?

Accepted Answer

For employees covered under the Act, if the number of months in the final year exceeds 6, the year is rounded up to a full year (for example, 5 years 7 months counts as 6 years, but 5 years 6 months counts as 5 years). For employees not covered, only fully completed years are counted.

Question 4

Is gratuity taxable?

Accepted Answer

Government employees receive fully tax-free gratuity. For non-government employees, gratuity is exempt up to ₹20 lakh under Section 10(10) — specifically the least of ₹20 lakh, the actual gratuity received, and the formula amount. Any amount above the exemption is taxable as salary income.

Question 5

What is the maximum gratuity amount?

Accepted Answer

The maximum gratuity payable under the Act is ₹20,00,000 (₹20 lakh), following the 2018 amendment. This calculator applies the cap automatically, and the same ₹20 lakh is the lifetime tax-exemption ceiling.

Question 6

Is my salary data sent to any server?

Accepted Answer

No. All calculations happen entirely in your browser using JavaScript. Nothing you enter is sent to or stored on any server.

Gratuity Calculator

How this is calculated

Frequently Asked Questions

Gratuity Calculator

How this is calculated

Frequently Asked Questions