How this calculator works
Historical rule snapshot: India, 2024, Payment of Gratuity Act. For covered monthly-rated employees, use final basic salary plus dearness allowance and 15 days of pay per counted service year, with a 26-day divisor. An additional service fraction strictly over six months counts as a full year. The ordinary five-year condition is checked before rounding; death or disablement can waive it. The statutory ceiling used is INR 20 lakh. Special seasonal, piece-rate, contractual and disputed service cases are excluded.
Formula
Counted service = completed years + 1 if additional months exceed 6. Gratuity = min(2000000, monthly basic plus DA x 15 / 26 x counted service), when eligible.
Worked example
With INR 26,000 monthly basic plus DA and 10 completed years, gratuity is INR 150,000. Ten years and seven months counts as 11 years, giving INR 165,000.
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Frequently asked questions
Is this a restaurant tip calculator?
No. This page concerns the Indian employment gratuity benefit.
Is five years always required?
The Act has exceptions for death and disablement. Other service disputes require the relevant authority or agreement; this worksheet uses completed years.
Is the full payout tax-free?
This tool calculates a statutory amount, not a tax exemption. Exemption rules depend on the employee category and circumstances.