Gratuity Calculator
Gratuity due when you resign or retire, and how much of it is tax-free.
Calculation
15/26 × ₹60,000 × 9 = ₹3,11,538
8 years 7 months counts as 9 years, because a final part-year over 6 months is rounded up.
Gratuity formula
If your employer is covered by the Payment of Gratuity Act (10 or more employees): Gratuity = 15/26 × last drawn basic + DA × years of service. That is 15 days' pay for every year, taking a month as 26 working days. A final part-year of more than 6 months counts as a full year. If your employer is not covered, it is 15/30 × average salary of the last 10 months × completed years.
Eligibility
Permanent employees need 5 years of continuous service, except on death or disablement. Under the Labour Codes in force from November 2025, fixed-term employees qualify after 1 year. The Codes also make wages at least 50% of total pay, which raises gratuity for anyone whose basic was kept low.
Tax on gratuity
For private-sector employees, gratuity up to ₹20,00,000 over a whole career is tax-free. Anything above that is taxed at your slab rate. Gratuity for central and state government employees is fully exempt.