Enter your last drawn Basic + DA and your years of service to calculate your gratuity using the Code on Social Security, 2020 gratuity formula, with the ₹20,00,000 cap and the 5-year eligibility rule applied automatically. Free, instant and private, nothing is sent anywhere.
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The gratuity formula under the Code on Social Security, 2020, in four steps.
Use the monthly figure from your latest payslip, Basic salary plus any dearness allowance.
Completed years with the same employer; 6+ months in the final year rounds up.
(Basic + DA) × 15 ÷ 26 × years, 15 days' wages for each year on a 26-day month.
The statutory maximum tax-free gratuity is ₹20,00,000.
Gratuity = (last drawn Basic + DA) × 15 ÷ 26 × years of service
Capped at ₹20,00,000 · 15 days' wages per completed year on a 26-day month.
Priya's last drawn Basic + DA is ₹40,000 and she has worked 7 years and 7 months. The 7 months rounds up, so she is credited with 8 years.
Gratuity = 40,000 × 15 ÷ 26 × 8 = ₹1,84,615. This is below the ₹20,00,000 cap and, being under the exemption limit, is tax-free.
Gratuity is one part of your pay. Use the Take-home Salary Calculator for your full gross-to-net breakdown (with India PF, HRA and Professional Tax), the Income Tax Calculator for your tax, or Payroll Processing for a full statutory register.
How is gratuity calculated in India?
For employees covered by the Code on Social Security, 2020, gratuity = (last drawn Basic + DA) × 15 ÷ 26 × number of years of service. The 15/26 represents 15 days of wages for each completed year, based on a 26-day working month. The total is capped at ₹20,00,000.
Who is eligible for gratuity?
Gratuity is normally payable after you complete 5 years of continuous service with the same employer, on resignation, retirement or superannuation. The 5-year condition is waived if service ends due to death or disablement.
Does 6 months of service count as a full year?
In the final year, 6 months or more of service is rounded up to a full year; less than 6 months is ignored. For example, 7 years and 7 months counts as 8 years, while 7 years and 4 months counts as 7 years.
Is gratuity taxable?
For employees covered by the Code on Social Security, 2020, gratuity up to ₹20,00,000 is exempt from income tax. Amounts above the exemption limit are taxable. Rules differ for government employees and for those not covered by the Act, check your specific case.
What is Basic + DA and why does gratuity use it?
Gratuity is calculated on your last drawn Basic salary plus Dearness Allowance (DA), not on your full CTC or gross pay. Allowances like HRA and special allowance are excluded from the gratuity base.
Please note: Outputs are AI-generated and can contain errors. Use them as a starting point and check anything important before you act on it.
Open the calculator, enter your last drawn Basic + DA and your years of service, and see your gratuity instantly with the statutory formula, rounding rule and ₹20,00,000 cap applied.
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