Gratuity Calculator India — Entitlement Under Gratuity Act 2026

Last updated: 29 April 2026 Reviewed by Arjun Mehta, CA

**Gratuity** is a one-time payment made by an employer to an employee at the time of resignation, retirement, or death/disability, if the employee has completed at least 5 years of continuous service. The formula under the Payment of Gratuity Act: Gratuity = (Last drawn Basic + DA) × 15/26 × Number of years of service. Gratuity is tax-free up to ₹20 lakh.

Last Basic + DA (₹/month)

Years of Continuous Service Minimum 5 years (240 days/year)

Gratuity Amount —

Tax-Free Component (up to ₹20 lakh) —

Taxable Gratuity —

Gratuity Per Year of Service —

View Year-by-Year Breakdown

Real-World Examples — 2026

₹50,000 basic, 10 years service

Gratuity = 50,000 × 15/26 × 10 = ₹2,88,462. Fully tax-free (below ₹20 lakh limit). That's ₹28,846/year of service. For 20 years, gratuity = ₹5,76,923 — still tax-free as under ₹20 lakh.

High earner — ₹2 lakh basic, 15 years

Gratuity = 2,00,000 × 15/26 × 15 = ₹17,30,769. Tax-free. For 20 years: ₹23,07,692 — ₹3,07,692 above ₹20 lakh limit is taxable at slab rate.

Frequently Asked Questions

What is the gratuity formula in India?

Gratuity = (Basic + DA) × 15 ÷ 26 × Years of Service. The '15' is for 15 days of salary, '26' converts monthly salary to daily (26 working days/month). Example: ₹50,000 basic, 10 years = 50,000 × 15 ÷ 26 × 10 = ₹2,88,462.

Is gratuity tax-free?

Gratuity up to ₹20 lakh (revised limit) is tax-free for private sector employees under the Payment of Gratuity Act. Government employees get full tax exemption. Amounts above ₹20 lakh are taxable as income from salary.

When am I eligible for gratuity?

Gratuity is payable on: resignation/retirement after 5+ years continuous service, termination (no minimum service requirement), death or disability (no minimum service). The 5-year rule is waived in case of death. Gratuity must be paid within 30 days of becoming payable.

Is the Gratuity Calculator free?

Yes, completely free on CalcPhi with no registration.

Are my inputs stored?

No. All calculations run in your browser. Your data is never stored.

Is it mobile-friendly?

Yes. Works on all modern smartphones and tablets.