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Gratuity Calculator

Free to Use

Calculate gratuity payable under Payment of Gratuity Act, 1972. Find taxable and exempt gratuity for covered and non-covered employees.

Country

Employment Details

Basic salary + Dearness Allowance per month

Years

Months (0–11)

Entered: 7 yrs 3 mo→Effective: 7 yrs

Regular employees require a minimum of 5 continuous years of service.

Organizations with 10+ employees are covered under Payment of Gratuity Act, 1972.

Standard service rules apply.

Inflation Adjustment (Optional)

Shows present value of future gratuity at 6% inflation

₹2,01,923

Gratuity Amount

Gratuity Breakdown

Monthly Basic + DA

₹50,000

Service Period (entered)

7 yrs 3 mo

Effective Years Used

After rounding rule (months ≥ 6 → round up)

7 yrs

Formula

Basic+DA × 15 × 7 ÷ 26

Tax Exempt Amount

Up to ₹20,00,000 (private — covered)

₹2,01,923

Taxable Gratuity

max(0, Gratuity − ₹20L)

₹0

Gratuity Composition

Tax-Exempt Gratuity₹2,01,923 (100.0%)

Your entire gratuity of ₹2,01,923 is tax-exempt.

Inflation-Adjusted Value

₹2,01,923

Gratuity at Retirement

Nominal value (future rupees)

₹1,12,753

Present Value Today

At 6% inflation, 10 yrs away

In today's purchasing power, your ₹2,01,923 gratuity at retirement is worth approximately ₹1,12,753.

ℹ️

How gratuity is calculated

  • Covered employees (Gratuity Act): Basic+DA × 15 × Years ÷ 26
  • Not covered: Basic+DA × 15 × Years ÷ 30
  • Months ≥ 6 in the last year round up to the next full year
  • Fixed-term (Labour Code 2023): eligible after 1 year, not 5
  • Death/Disability: eligible from Day 1, no minimum service
  • VRS: eligible after 10 years; Govt employees: fully tax-exempt

Frequently Asked Questions

Is this gratuity calculator free?›
Yes, completely free. No sign-up or payment required. Calculate your gratuity eligibility and amount instantly.
Which country's gratuity rules does this calculator follow?›
This calculator is built for India. It applies the Payment of Gratuity Act, 1972 (for private sector covered and non-covered employees), the New Labour Code 2023 rules for fixed-term contracts (eligible after 1 year instead of 5), and Indian Income Tax rules for gratuity exemption (up to ₹20,00,000 exempt for private employees; fully exempt for government employees).
How do I use the gratuity calculator?›
Enter your last drawn monthly Basic Salary plus DA (Dearness Allowance), then enter your service period in years and months. Select your employment type (Regular or Fixed-Term), employee category (Private Covered, Private Not Covered, or Government), and reason for leaving (resignation, retirement, VRS, death, or disability). The calculator shows eligibility, effective years of service (applying the months ≥ 6 rounding rule), gratuity amount, tax-exempt vs taxable split, and inflation-adjusted present value.
What does this gratuity calculator compute?›
It calculates gratuity using both formulas — Basic+DA × 15 × Years ÷ 26 for covered employees and ÷ 30 for non-covered — applies the ₹20,00,000 statutory maximum cap, determines eligibility based on service period and exit reason (death/disability have no minimum, VRS needs 10 years, regular resignation needs 5 years, fixed-term needs 1 year), splits the gratuity into tax-exempt and taxable components, and shows an inflation-adjusted present value of your future gratuity at 6% inflation.
Is gratuity taxable in India?›
For government employees, gratuity is fully tax-exempt with no upper limit. For private sector employees covered under the Payment of Gratuity Act, gratuity up to ₹20,00,000 is tax-exempt; any amount above that is taxable. For private sector employees not covered under the Act, the exemption is the least of: actual gratuity received, ₹20,00,000, or half-month salary per year of service. This calculator automatically applies the correct exemption rule based on your employee category.

What Is Gratuity Calculator India?

A gratuity calculator computes the gratuity amount an employee is entitled to upon leaving a job, under the Payment of Gratuity Act 1972. Gratuity applies after 5 years of continuous service (or 240 days/year if not covered by the Act). The formula is: Gratuity = (Last Basic Salary × 15 × Years of Service) / 26. Formly's free gratuity calculator handles both Act-covered and non-Act-covered employees, with a clear breakdown of the formula and applicable tax exemption limits for FY 2026.

Why Formly's Gratuity Calculator India Is the Best Free Option

  • ✓Both covered and non-covered employees — different formulas applied correctly.
  • ✓Tax exemption threshold — shows taxable vs tax-exempt gratuity under the ₹20L limit.
  • ✓Partial year handling — correctly applies "6 months or more" rule for rounding.
  • ✓Clear formula breakdown — see exactly how your gratuity was calculated.
  • ✓Free and instant — no account, no data collection.

Free Alternative to ClearTax gratuity calculator, HR Katha gratuity calculator

→ClearTax gratuity calculator: Redirects to tax services. Formly focuses on pure calculation.
→HR Katha gratuity calculator: Limited functionality. Formly handles both Act-covered and non-covered scenarios.

Who Uses Gratuity Calculator India?

Employees leaving jobs

Verify gratuity entitlement before discussions with HR or claiming via labor commissioner.

HR & payroll professionals

Calculate accurate gratuity provisions for departing employees.

Finance teams

Provision gratuity liability in annual accounts and actuarial valuations.

Popular searches: gratuity calculator India, gratuity calculation formula, Payment of Gratuity Act calculator, how much gratuity will I get, gratuity calculator 2026.

Looking for a detailed guide? Read our in-depth tutorial on using Gratuity Calculator India for professional results.

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