Run a conservative scenario before relying on the headline result.
Gratuity Calculator
Estimate gratuity from salary and completed service. Adjust the assumptions, inspect the chart and read the complete guide below.
02 Your projection
Estimated gratuity₹5.19 LUpdates instantly as you edit
Total invested / base₹0
Growth / cost₹5.19 L
Years of service12 years
Projection journeyHover to inspect a year
Eligibility, rounding and employer coverage may affect the final payable amount.
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Five smart nudges
Use the result with context.
Review the assumptions after any major change in income, rates or goals.
Keep emergency money separate from long-term investments.
Account for taxes, charges and inflation when comparing options.
Use this estimate to ask better questions, not as a return promise.
Understanding Gratuity in India
Editorially reviewed 12 July 2026 · Rules and assumptions can change
The 15/26 formula
For an employee covered by the statutory formula, indicative gratuity is last drawn eligible salary × 15/26 × years of service counted under the applicable rounding rule. At ₹75,000 basic plus DA and 12 counted years, the estimate is about ₹5.19 lakh. It is not 15% of annual CTC.
Eligible salary, continuous service and establishment coverage matter. Employer policy, award or contract can provide a more favourable benefit, while different rules may apply to employees outside the standard formula.
Service eligibility and rounding
General eligibility is often associated with five years of continuous service, with statutory exceptions such as death or disablement. Treatment of service beyond completed years depends on the governing rule; do not manually round every fraction upward.
Transfers within a group, breaks, fixed-term employment and historical service records need HR verification. The calculator cannot adjudicate service continuity.
Ceiling and taxation
Payment entitlement and income-tax exemption are related but separate calculations. Statutory ceilings, government/private employment, amounts received from multiple employers and prior exemptions can affect the exempt portion. Any excess may be taxable under current law.
Do not assume the displayed estimate is fully tax-free. Obtain the employer’s computation and preserve Form 16 or settlement records.
Gratuity checklist
Confirm last drawn basic plus eligible DA, covered service, joining and leaving dates, unpaid leave treatment, prior group service, nomination and employer policy. Compare HR’s year count with records.
Calculate gross entitlement, statutory cap and tax exemption separately. Seek clarification before signing full-and-final settlement if figures differ.
Official sources used for this guide
- Income Tax Department — AY 2026–27 validation rules including gratuity reporting ↗
- Income Tax Department — Income-tax Act 2025 FAQs ↗
Rates, thresholds and rules can change after the review date. Check the linked authority and the provider’s current documents before acting.
Gratuity calculator FAQs
Is gratuity based on gross salary?
The standard statutory formula commonly uses last drawn basic plus eligible dearness allowance, not total CTC.
Is five years always required?
General eligibility and statutory exceptions depend on the governing law and facts.
Does every extra month count as a full year?
No. Apply the prescribed service-counting rule rather than arbitrary rounding.
Is the whole payment tax-free?
Not necessarily. Exemption depends on employee category, limits, past receipts and current law.
Can an employer pay more than the formula?
A contract or policy may provide more favourable benefits, subject to its terms.