Gratuity Calculator

Calculate your exact statutory gratuity amount on job resignation or retirement with BharatUtility's Gratuity Calculator. Fully compliant with Payment of Gratuity Act (15/26 formula) and ₹20 Lakh tax exemption limit.

Interactive Gratuity Calculator
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Formula & Calculation Methodology

Gratuity = (15 × Last Drawn Basic Salary & DA × Completed Years of Service) ÷ 26

	ext{Gratuity} = rac{15 	imes (	ext{Basic} + 	ext{DA}) 	imes 	ext{Tenure}}{26}

Step-by-Step Worked Example

Last Drawn Monthly Basic + DA: ₹50,000 | Tenure: 7 Years (Covered under Gratuity Act)

  1. 15 Days Salary Component = (15 × ₹50,000) ÷ 26 = ₹28,846.15
  2. Gratuity Payout = ₹28,846.15 × 7 Years = ₹2,01,923
  3. Tax Status: Fully Tax-Free (Well below ₹20,00,000 statutory limit)
Result: Total Gratuity Payable: ₹2,01,923 (100% Tax-Exempt)

When are you eligible to receive Gratuity?

Under the Payment of Gratuity Act, 1972, an employee is eligible for gratuity after completing at least 5 years of continuous service in an organization with 10 or more employees.

The 5-year requirement is waived in case of death or permanent disability of an employee.

Frequently Asked Questions

Is gratuity calculated on CTC or Basic Salary?

Gratuity is calculated strictly on your Last Drawn Basic Salary plus Dearness Allowance (DA), not on gross CTC or variable allowances.

What is the maximum tax-free gratuity limit in India?

Under Section 10(10) of the Income Tax Act, non-government private employees enjoy tax exemption up to ₹20,00,000 (20 Lakhs).

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