Calculate
Gratuity Calculator
Gratuity payable on leaving, and how much of it is exempt under section 10(10).
Gratuity is a lump sum payable for continuous service, normally after five years with the same employer. The five-year condition is waived where service ends because of death or disablement.
Enter your last drawn basic pay plus dearness allowance and your length of service. The calculator applies the statutory formula and then the section 10(10) exemption test.
How it is calculated
Employer covered by the Act
- Gratuity = (last drawn basic + DA) × 15 ÷ 26 × completed years
- Service beyond six months in the final year is rounded up to a full year.
Employer not covered by the Act
- Gratuity = average monthly salary × 15 ÷ 30 × completed years
- Part years are ignored.
Exemption under section 10(10)
- Government employees: fully exempt
- Others: least of actual gratuity received, the formula amount, and ₹20,00,000 (lifetime, across all employers)
Things to keep in mind
- The ₹20,00,000 ceiling is cumulative over your working life, not per employer.
- Gratuity must be paid within 30 days of becoming payable; delay attracts simple interest under section 7(3A) of the Act.
- The Code on Social Security, 2020 will change eligibility for fixed-term employees once its provisions are brought into force — check your contract.
Frequently asked questions
Sources & official references
- Ministry of Labour & Employment — Payment of Gratuity Act, 1972
- Income Tax Department — section 10(10) exemption
- Notification S.O. 1420(E) dated 29 March 2018 — ₹20 lakh ceiling
Rates, thresholds and limits used by this calculator were verified on 7 September 2026 and may change with a Finance Act, GST Council decision or other official notification. This page is general information, not tax or investment advice — please confirm your specific position with us before acting.