Gratuity Calculator
Gratuity is a lump sum an employer pays for long service. The statutory formula gives fifteen days of salary for every completed year, using only your basic pay and dearness allowance, not your full cost to company.
Gratuity payable
$288,461.54
- Monthly salary used
- $50,000.00
- Months of salary
- 5.7692
- Eligibility (5+ years)
- 1
Values update as you type. This calculator covers the single scenario its formula assumes — see Common Mistakes for what it leaves out.
The formula this calculator uses
Gratuity = (15 / 26) x monthly salary x completed years
- Salary
- Last drawn monthly basic plus DA
- Years
- Completed years of service
How to check the result by hand
- 1
Total your basic and DA
Add the last drawn monthly basic salary and dearness allowance. Leave out allowances, bonuses and overtime.
- 2
Count completed years
Take the completed years of continuous service, rounding part-years in line with the Act and your employer's practice.
- 3
Apply fifteen over twenty-six
Multiply the salary by fifteen, divide by twenty-six and multiply by the completed years.
- 4
Check eligibility
Confirm you have at least five years of continuous service, unless the case is death or disablement.
- 5
Compare with the exemption limit
Gratuity up to the notified ceiling is tax-free, so check how much of the amount falls above it.
For worked examples, common mistakes and the limits of this formula, read the full How To Calculate Gratuity page.