Assumptions
- India tax logic is a simplified FY 2026-27 salaried-individual model.
- New-regime marginal relief is modeled in simplified form; surcharge, special-rate incomes, and state-specific details are not fully modeled.
- Verify current rules with a qualified tax advisor before filing or choosing a regime.
Formula Used
Gratuity = 15 / 26 x (basic + DA) x completed years
Fifteen days of salary for each completed year, where a month is treated as 26 working days. This applies to establishments covered by the Act; employers outside it may use a different basis.
Example gratuity
- Enter monthly basic plus dearness allowance.
- Enter completed years and any additional months.
- Review the payable amount and how much of it is exempt.
Common Mistakes and Limitations
Common mistakes
- Treating an estimate as a guaranteed outcome.
- Ignoring fees, taxes, penalties, or changing rates.
- Using annual and monthly rates interchangeably.
- Forgetting that a calculator is only as reliable as the inputs entered.
Limitations
- The rule may be too simple for complex financial situations.
- It does not replace personalized advice from a qualified professional.
- Real results can change because of taxes, fees, rates, inflation, and behavior.
Full guide
How to use this calculator well
Open for inputs, methodology, useful cases, and deeper educational notes.
What is Gratuity Calculator?
Gratuity Calculator answers a specific salary question without opening a spreadsheet. Enter monthly basic + da, completed years of service and additional months beyond those years, review the estimate as you type, and open the formula block to see how the result is produced.
It uses INR defaults, Indian number formatting, and India-specific assumptions where relevant.
Inputs explained
Monthly basic + DA
Monthly basic salary plus dearness allowance, as used for retirement-benefit calculations. Supported range: 0 to 100,000,000.
Completed years of service
Full years completed with this employer. In gratuity rules, part-years above six months usually count as a full year. Supported range: 0 to 50.
Use this when
You want a quick planning estimate before comparing detailed options.
This answers
Know what a job change or retirement is worth in terminal benefits before deciding.
Example situation
Enter monthly basic plus dearness allowance. Enter completed years and any additional months. Review the payable amount and how much of it is exempt.
Do not use this for
The rule may be too simple for complex financial situations.
Why this matters
Know what a job change or retirement is worth in terminal benefits before deciding.
When this tool is useful
- You want a quick planning estimate before comparing detailed options.
- You need a simple way to explain the decision to yourself or a family member.
Sources and review notes
Source links are provided for methodology and rule checking. Always verify live tax or lender rules before making decisions.
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IndiaFAQ
What is a gratuity calculator?
A gratuity calculator estimates gratuity payable under the Payment of Gratuity Act from the inputs you provide. It shows the formula and the assumptions so you can check the working, rather than predicting a guaranteed outcome.
Are the results guaranteed?
No. The results are estimates based on the stated formula, your input values, and the assumptions listed on this page. Interest rates, tax rules, market returns, and inflation all change.
Is gratuity calculated on CTC?
No. The statutory formula uses last drawn basic salary plus dearness allowance, which is usually a fraction of CTC. Using CTC is the most common reason people expect a much larger figure than they receive.
What happens if I leave before five years?
Gratuity generally becomes payable only after five years of continuous service. Death and permanent disablement are statutory exceptions. A part-year of more than six months counts as a completed year, which can carry someone just short of five years over the line.
Is the whole amount tax-free?
Gratuity from a non-government employer is exempt up to a statutory ceiling, and that ceiling is a lifetime limit across every employer rather than one per job. Anything above it is taxable as salary.