Courts have held that 4 years and 240 working days in the fifth year counts as 5 years for eligibility; many employers follow this. Check your employer's policy.
Gratuity Calculator
Compute your gratuity from the last drawn basic + DA and years of service using the Payment of Gratuity Act formula (15 days' wages per year), with the ₹20 lakh tax-free limit explained.
Gratuity amount
₹3,46,154
Tax-free portion
₹3,46,154
Taxable portion
₹0
Years counted
10
6+ months rounds up
Gratuity at this salary by tenure
| Years of service | Gratuity |
|---|---|
| 5 | ₹1,73,077 |
| 10 | ₹3,46,154 |
| 15 | ₹5,19,231 |
| 20 | ₹6,92,308 |
| 25 | ₹8,65,385 |
| 30 | ₹10,38,462 |
How the Gratuity Calculator works
Under the Payment of Gratuity Act, 1972 (establishments with 10+ employees), gratuity = last drawn basic + DA × 15/26 × years of service. A part-year of 6 months or more counts as a full year.
Employers not covered by the Act commonly use half a month's average salary (15/30) per completed year, without rounding up.
Gratuity up to ₹20 lakh (lifetime, across employers) is tax-free for private-sector employees; government employees' gratuity is fully exempt.
Gratuity = (Basic + DA) × 15 ÷ 26 × Years of service
- 15
- days' wages per year
- 26
- working days in a month
Worked example
- Last drawn basic + DA (monthly): ₹60,000
- Completed years of service: 10 yrs
- Additional months: 0 mo
- Employer: Covered under Gratuity Act
With a last drawn basic + DA of ₹60,000 and 10 years of service: 60,000 × 15 ÷ 26 × 10 = ₹3,46,154, fully tax-free since it is under the ₹20 lakh limit.