Gratuity Calculator 2026

Calculate your gratuity payable under the Code on Social Security, 2020 (formerly the Payment of Gratuity Act, 1972) — including the ₹20 lakh tax-free cap.

Employment / Employer Category

15/26 formula applies. ≥6 months in final year rounds up to +1 year. Mandatory 5 yrs service.

Monthly Basic Salary + DA

₹

Enter Basic Pay + Dearness Allowance (DA) from payslip. Exclude HRA, Special Allowance & Bonus.

₹5,000₹5.00 L

Completed Service Years

050

Additional Months

011

Eligible

Gratuity Payout: ₹2.88 L; Eligible! Based on 10 years counted.

Tax-Free Portion (Exempt): ₹2.88 L
Taxable Portion: ₹0 (Tax Free)

Private sector tax exemption limit: ₹20,00,000 (Lifetime cap under section 19 of the Income-tax Act, 2025; earlier §10(10)).

Year-by-Year Gratuity Payout Projection

See how your gratuity entitlement grows from Year 1 to 30.

Show as

1 Year
Applied Formula
15/26 × Basic × Yrs
Tax-Free Limit
₹0
Taxable Amount
₹0
Gratuity Payable
₹0 (Ineligible)
2 Years
Applied Formula
15/26 × Basic × Yrs
Tax-Free Limit
₹0
Taxable Amount
₹0
Gratuity Payable
₹0 (Ineligible)
3 Years
Applied Formula
15/26 × Basic × Yrs
Tax-Free Limit
₹0
Taxable Amount
₹0
Gratuity Payable
₹0 (Ineligible)
4 Years
Applied Formula
15/26 × Basic × Yrs
Tax-Free Limit
₹0
Taxable Amount
₹0
Gratuity Payable
₹0 (Ineligible)
5 Years
Applied Formula
15/26 × Basic × Yrs
Tax-Free Limit
₹1.44 L
Taxable Amount
₹0
Gratuity Payable
₹1.44 L
6 Years
Applied Formula
15/26 × Basic × Yrs
Tax-Free Limit
₹1.73 L
Taxable Amount
₹0
Gratuity Payable
₹1.73 L
7 Years
Applied Formula
15/26 × Basic × Yrs
Tax-Free Limit
₹2.02 L
Taxable Amount
₹0
Gratuity Payable
₹2.02 L
8 Years
Applied Formula
15/26 × Basic × Yrs
Tax-Free Limit
₹2.31 L
Taxable Amount
₹0
Gratuity Payable
₹2.31 L
9 Years
Applied Formula
15/26 × Basic × Yrs
Tax-Free Limit
₹2.60 L
Taxable Amount
₹0
Gratuity Payable
₹2.60 L
10 YearsYour Input
Applied Formula
15/26 × Basic × Yrs
Tax-Free Limit
₹2.88 L
Taxable Amount
₹0
Gratuity Payable
₹2.88 L
11 Years
Applied Formula
15/26 × Basic × Yrs
Tax-Free Limit
₹3.17 L
Taxable Amount
₹0
Gratuity Payable
₹3.17 L
12 Years
Applied Formula
15/26 × Basic × Yrs
Tax-Free Limit
₹3.46 L
Taxable Amount
₹0
Gratuity Payable
₹3.46 L
13 Years
Applied Formula
15/26 × Basic × Yrs
Tax-Free Limit
₹3.75 L
Taxable Amount
₹0
Gratuity Payable
₹3.75 L
14 Years
Applied Formula
15/26 × Basic × Yrs
Tax-Free Limit
₹4.04 L
Taxable Amount
₹0
Gratuity Payable
₹4.04 L
15 Years
Applied Formula
15/26 × Basic × Yrs
Tax-Free Limit
₹4.33 L
Taxable Amount
₹0
Gratuity Payable
₹4.33 L
16 Years
Applied Formula
15/26 × Basic × Yrs
Tax-Free Limit
₹4.62 L
Taxable Amount
₹0
Gratuity Payable
₹4.62 L
17 Years
Applied Formula
15/26 × Basic × Yrs
Tax-Free Limit
₹4.90 L
Taxable Amount
₹0
Gratuity Payable
₹4.90 L
18 Years
Applied Formula
15/26 × Basic × Yrs
Tax-Free Limit
₹5.19 L
Taxable Amount
₹0
Gratuity Payable
₹5.19 L
19 Years
Applied Formula
15/26 × Basic × Yrs
Tax-Free Limit
₹5.48 L
Taxable Amount
₹0
Gratuity Payable
₹5.48 L
20 Years
Applied Formula
15/26 × Basic × Yrs
Tax-Free Limit
₹5.77 L
Taxable Amount
₹0
Gratuity Payable
₹5.77 L

Service Tenure	Applied Formula	Gratuity Payable	Tax-Free Limit	Taxable Amount
1 Year	15/26 × Basic × Yrs	₹0 (Ineligible)	₹0	₹0
2 Years	15/26 × Basic × Yrs	₹0 (Ineligible)	₹0	₹0
3 Years	15/26 × Basic × Yrs	₹0 (Ineligible)	₹0	₹0
4 Years	15/26 × Basic × Yrs	₹0 (Ineligible)	₹0	₹0
5 Years	15/26 × Basic × Yrs	₹1.44 L	₹1.44 L	₹0
6 Years	15/26 × Basic × Yrs	₹1.73 L	₹1.73 L	₹0
7 Years	15/26 × Basic × Yrs	₹2.02 L	₹2.02 L	₹0
8 Years	15/26 × Basic × Yrs	₹2.31 L	₹2.31 L	₹0
9 Years	15/26 × Basic × Yrs	₹2.60 L	₹2.60 L	₹0
10 YearsYour Input	15/26 × Basic × Yrs	₹2.88 L	₹2.88 L	₹0
11 Years	15/26 × Basic × Yrs	₹3.17 L	₹3.17 L	₹0
12 Years	15/26 × Basic × Yrs	₹3.46 L	₹3.46 L	₹0
13 Years	15/26 × Basic × Yrs	₹3.75 L	₹3.75 L	₹0
14 Years	15/26 × Basic × Yrs	₹4.04 L	₹4.04 L	₹0
15 Years	15/26 × Basic × Yrs	₹4.33 L	₹4.33 L	₹0
16 Years	15/26 × Basic × Yrs	₹4.62 L	₹4.62 L	₹0
17 Years	15/26 × Basic × Yrs	₹4.90 L	₹4.90 L	₹0
18 Years	15/26 × Basic × Yrs	₹5.19 L	₹5.19 L	₹0
19 Years	15/26 × Basic × Yrs	₹5.48 L	₹5.48 L	₹0
20 Years	15/26 × Basic × Yrs	₹5.77 L	₹5.77 L	₹0

Gratuity Accumulation Trajectory

Visual growth curve of your gratuity benefit over service tenure.

Gratuity formula, with your numbers

Standard Formula

Gratuity = 15 × (Basic Salary + DA) × Years ÷ 26

Live Calculation (Plugging Your Values)

Monthly Basic Salary + DA (B):₹50,000

Years counted (n):10

Days in a month (divisor) (d):26

Substituted Equation:

15 × ₹50,000 × 10 ÷ 26 = ₹2.88 L

Gratuity Payout:₹2.88 L

Why 26? The law assumes 26 working days in a month (excluding 4 Sundays), crediting 15 days of wages per year served.

📖 In-Depth Financial Guide10 min read

Gratuity Calculation Formula (15/26 Rule) & 5-Year Exemption Guide

Why 26 is used instead of 30, the 4-year 240-day court precedent, contract employee rules, and claiming the ₹20 Lakh tax exemption.

Read Full Guide

Complete Guide to Gratuity Rules in India (FY 2025–26 & FY 2026–27)

Gratuity is a statutory monetary benefit provided by an employer to an employee in recognition of long-term continuous service. It is governed primarily by the Code on Social Security, 2020, which replaced the Payment of Gratuity Act, 1972 on 21 November 2025.

Whether you are planning a resignation, job change, or retirement, understanding gratuity calculation formulas, 6-month rounding rules, and tax exemption thresholds ensures you claim your exact statutory dues.

1. The 15/26 Act Formula (Covered)

Applies to private & PSU organizations with 10 or more employees.

2. The 15/30 Rule (Not Covered)

Applies when employer is not covered under the Gratuity Act (governed by section 19, Table Sl. No. 6, of the Income-tax Act, 2025; earlier §10(10)(iii)).

Key Legal Updates & Special Provisions

New 1-Year Rule for Fixed-Term Employees: Under the Code on Social Security 2020, fixed-term contractual staff qualify for gratuity after completing just 1 year of continuous service (pro-rata).
The 4 Years 240 Days Question: Section 54 of the Code (section 2A of the old Payment of Gratuity Act) counts a year as continuous service if you actually worked at least 240 days in the preceding 12 months, or 190 days in a mine or an establishment working less than six days a week. Some High Court rulings have used this to treat 4 years plus 240 days in the 5th year as 5 years, but the Code itself does not say so, so it is not guaranteed. This calculator requires 5 full years.
New Wage Code 50% Rule: Under the Code on Wages, Basic Salary + DA must constitute at least 50% of your total CTC. If allowances exceed 50%, the excess is added back to Basic for gratuity computation.
Lifetime ₹20 Lakh Tax Exemption Cap: For private employees, up to ₹20,00,000 of gratuity is tax-exempt over an individual's entire professional career under section 19 of the Income-tax Act, 2025 (earlier section 10(10)). Central and State Govt staff enjoy 100% tax-free status.

References

How these numbers are checked →

Gratuity FAQs

What is the formula for gratuity calculation in India?

For employees covered by the Code on Social Security, 2020 (formerly the Payment of Gratuity Act, 1972): Gratuity = (15 × last drawn Basic + DA × years of service) / 26. The 26 represents working days in a month. For employees not covered, the divisor is 30 and service is counted in completed years only.

What is the maximum tax-free limit for gratuity?

₹20,00,000 under section 19 of the Income-tax Act, 2025 (earlier section 10(10)) for non-government employees covered by the Act. This is a lifetime ceiling across all employers, not per job. Anything above it is taxable at your slab rate. Government employees receive gratuity fully exempt.

Is 5 years of continuous service mandatory for gratuity?

Yes, except on death or disablement, where it is paid regardless of tenure (section 53 of the Code on Social Security, 2020). Section 54 counts a year as continuous service if you actually worked at least 240 days in the preceding 12 months, or 190 days in an establishment that works less than six days a week. Some High Court rulings have used this to treat 4 years plus 240 days in the fifth year as 5 years, but the Code does not say so itself; this calculator applies the full 5-year rule.

How does the Code on Social Security change gratuity?

The Code extends gratuity to fixed-term employees on a pro-rata basis with no 5-year minimum, and bases the calculation on 'wages' as newly defined — where allowances above 50% of total pay get added back to wages. For employees on low-basic, high-allowance structures this raises the payout.

How soon must my employer pay gratuity, and what if they do not?

Gratuity is payable within 30 days of it becoming due, and the employer must work out the amount and offer it even if you never apply. Miss that deadline and simple interest is payable for the delay at the rate notified by the Central Government. If it is still unpaid, file Form N with the Controlling Authority, usually the Labour Commissioner of your district, within 90 days; there is no court fee and you do not need a lawyer to start.

Do I get gratuity if I resign, and does notice period count?

Yes. Gratuity is payable on resignation, retirement, superannuation, death or disablement alike — the only bar is dismissal for proven misconduct involving violence, moral turpitude or wilful damage, and even then the forfeiture is limited to the damage caused. Notice period served counts as continuous service because you remain on the rolls; notice bought out and not served does not, which can matter right at the five-year line.

Is gratuity taxable, and how much is exempt?

For private sector employees covered by the Act, the exemption under section 19 of the Income-tax Act, 2025 (earlier section 10(10)) is the least of the actual gratuity received, Rs 20,00,000, and the formula amount of 15 divided by 26 times last drawn basic plus DA times years of service. On a Rs 50,000 basic with 10 years of service that formula gives about Rs 2,88,462, fully exempt. The Rs 20 lakh ceiling is a lifetime limit across all employers, not per job.

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