Calculate the gratuity you're owed on resignation or retirement, using the statutory 15/26 formula and the current ₹20 lakh tax-free ceiling.
If covered, a service period of 6 months or more beyond a completed year rounds up to the next full year. That's already applied below.
The "15/26" in the formula represents 15 days' wages for every completed year of service, based on a 26 working day month, the typical assumption once weekly offs are excluded. Employees not covered under the Act use a 30 day month instead, which works out to a slightly smaller payout for the same tenure and salary.
Enter your last drawn basic plus DA, your completed years and extra months of service, and whether you're covered under the Payment of Gratuity Act. The tool rounds your service period up to the nearest year where applicable, applies the 15/26 or 15/30 formula depending on your coverage, and then caps the result at the current statutory ceiling if the raw calculation comes out higher.
You need at least 5 years of continuous service to claim gratuity, unless you're leaving due to death or permanent disability, in which case that condition doesn't apply. Whatever the formula computes, the payout is capped at ₹20 lakh for private sector employees. Anything the formula would otherwise produce above that is not payable as gratuity, though an employer can choose to pay more as an ex-gratia amount, which is taxed differently.
Generally after 5 years of continuous service, waived only in case of death or permanent disability.
₹20 lakh for private-sector employees; ₹25 lakh for central government employees, effective January 2024.
Fully exempt for government employees; exempt up to ₹20 lakh (cumulative) for private-sector employees covered under the Act, with anything above that taxed as salary income.