Gratuity Calculator
Updated 20 August 2026
Estimate the gratuity payable on retirement or resignation under the Payment of Gratuity Act, and how much of it is tax-exempt.
Open the Live Gratuity Calculator →Frequently asked questions
What is gratuity?
Gratuity is a lumpsum benefit paid by an employer to an employee as a token of appreciation for continuous service, typically paid out on retirement, resignation after a minimum qualifying period, or in the unfortunate event of the employee's death or disability.
Who is eligible for gratuity?
Under the Payment of Gratuity Act, an employee is generally eligible after completing at least 5 years of continuous service with the same employer, though this minimum period doesn't apply in cases of death or disablement, where gratuity is paid regardless of tenure.
What is the formula for calculating gratuity under the Act?
For employees covered under the Payment of Gratuity Act, gratuity is calculated as (Last drawn Basic + DA) × 15 × number of years of service, divided by 26 — the 26 representing the standard number of working days in a month for this calculation.
Why is the divisor 26 and not 30?
The Payment of Gratuity Act treats 26 as the number of working days in a month (excluding weekly offs), since gratuity is meant to represent 15 days of wages for each completed year of service, calculated on a working-day basis rather than a calendar-day basis.