Example
Last drawn basic + DA ₹50,000 and service of 10 years 7 months (counted as 11 years): gratuity = 50,000 × 15 × 11 ÷ 26 = ₹3,17,308, fully tax-free because it is below ₹20 lakh.
This is an estimate. Your employer's gratuity policy, the definition of wages under the labour codes and court rulings can change the final amount.
Related: salary (CTC to in-hand) · income tax calculator
How to use the Gratuity Calculator tool
- Enter your last drawn monthly basic + DA.
- Enter your years and months of service.
- Choose whether your employer is covered by the gratuity law.
- See your gratuity and how much of it is tax-free.
Why SaralKit?
- Free forever: no "credits", no trial, no premium tier, no watermark and no daily limit.
- No account, ever: nothing to sign up for. Just open the page and use it.
- No data stored: your files and the numbers you type are processed by your own browser. We never upload, store or see them.
- Works offline: once the page has loaded, most tools keep working without internet.
- Open source: anyone can read the code on GitHub.
Frequently asked questions
What is the gratuity formula?
Gratuity = last drawn monthly wages (basic + DA) × 15 × years of service ÷ 26. If your employer is not covered by the gratuity law, it is usually ÷ 30 instead of ÷ 26.
Who is eligible for gratuity?
Permanent employees usually after 5 years of continuous service (waived on death or disability). Under the Code on Social Security, 2020 (in force since November 2025), fixed-term employees become eligible after 1 year of service, on a pro-rata basis.
How are partial years counted?
Service of more than 6 months in the final year is rounded up to a full year. For example, 10 years 7 months counts as 11 years.
Is gratuity taxable?
For private-sector employees, gratuity is tax-free up to ₹20 lakh in a lifetime; anything above is taxable at your slab rate. For government employees it is fully exempt.
Did the labour codes change the wages used?
Under the labour codes, "wages" must be at least 50% of total pay; if allowances exceed 50%, the excess counts as wages. This can increase gratuity for people with a low basic salary. Ask HR how your wages are defined.