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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. 1

    Total your basic and DA

    Add the last drawn monthly basic salary and dearness allowance. Leave out allowances, bonuses and overtime.

  2. 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. 3

    Apply fifteen over twenty-six

    Multiply the salary by fifteen, divide by twenty-six and multiply by the completed years.

  4. 4

    Check eligibility

    Confirm you have at least five years of continuous service, unless the case is death or disablement.

  5. 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.