Gratuity Calculator 2026
Calculate your gratuity payout, tax exemptions, and eligibility under the Code on Social Security, 2020 (formerly the Code on Social Security, 2020 (formerly the Payment of Gratuity Act, 1972)).
15/26 formula applies. ≥6 months in final year rounds up to +1 year. Mandatory 5 yrs service.
Enter Basic Pay + Dearness Allowance (DA) from payslip. Exclude HRA, Special Allowance & Bonus.
₹2.88 L
Eligible! Based on 10 years counted.
Gratuity Accumulation Trajectory
Visual growth curve of your gratuity benefit over service tenure.
Year-by-Year Gratuity Payout Projection
See how your gratuity entitlement grows from Year 1 to 30.
| 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 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.
The Statutory Gratuity Formula: Evaluating Your End-of-Service Lump Sum
Under the Payment of Gratuity Act, 1972, gratuity is a statutory terminal benefit payable to employees who render at least 5 years of continuous service. It serves as an end-of-service appreciation reward computed strictly on your last drawn Basic Salary and Dearness Allowance.
Where 26 denotes the statutory number of working days in a calendar month, and 15 reflects 15 days of wages for every completed year of service.
Gratuity Eligibility & Calculation FAQs
Important legal and tax guidelines governing employee gratuity in India.
Is 5 full years of continuous service mandatory to receive gratuity?
Under Section 4(1) of the Act, 5 years of continuous service is mandatory upon resignation or retirement. However, judicial precedents confirm that 4 years and 240 days (approx. 4 years 8 months) satisfies the continuous service condition in non-seasonal establishments. In case of death or total disablement, the 5-year requirement is completely waived.
What is the maximum tax-free gratuity exemption limit in India?
Under Section 10(10) of the Income Tax Act, the maximum lifetime cumulative tax-free exemption limit for private sector employees covered under the Act is ₹20 Lakhs. Any gratuity received in excess of ₹20 Lakhs is taxable at applicable slab rates.
How does rounding of tenure work when calculating gratuity?
Under the Payment of Gratuity Act, any period of service exceeding 6 months is rounded up to the next full completed year. For instance, a tenure of 7 years and 7 months is calculated as 8 completed years.
Is gratuity calculated on full CTC or only Basic Salary?
Gratuity calculations are strictly anchored to your last drawn Basic Salary plus Dearness Allowance (DA). Special allowances, HRA, performance bonuses, and other components are excluded from the statutory gratuity formula.
Authoritative References & Government Acts
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