Gratuity Calculator
Total Gratuity Payable
₹0
Gratuity Calculator
A Gratuity Calculator is an online tool that helps employees estimate the amount of gratuity they are entitled to receive after completing five years of continuous service in an organization. Gratuity is a lump sum paid by the employer as a token of appreciation for long‑term service, governed by the Payment of Gratuity Act, 1972.
Employees who leave a job due to retirement, resignation, or disability caused by an accident or illness are eligible for gratuity. The calculator factors in key inputs such as the last drawn basic salary, dearness allowance (DA), and number of years of service to compute the final gratuity amount.
How the Calculator Helps You
- Accurate Estimation: Avoids errors in manual calculations and provides the correct gratuity amount instantly.
- Saves Time & Effort: Quickly calculate your gratuity amount without any hassle.
- Financial Planning: Knowing your gratuity helps plan future finances effectively.
- Scenario Comparison: Calculate gratuity for different salaries and service durations to assess potential payouts.
Formula for Gratuity Calculation (Covered Under the Act)
G = n × b × 15 ÷ 26
- G: Gratuity amount payable
- n: Years of service (rounded up if > 6 months)
- b: Last drawn basic salary + Dearness Allowance (DA)
Example: 9 yrs × ₹55,000 × 15 ÷ 26 = ₹2,85,577
Cap: Maximum ₹20 lakh; any excess is ex‑gratia.
Formula for Gratuity Calculation (Not Covered Under the Act)
Gratuity = (15 × Last drawn salary × Years of service) ÷ 30
- Years rounded up if > 6 months
Example: (15 × ₹48,000 × 6) ÷ 30 = ₹1,44,000
Cap: Maximum ₹20 lakh.
Taxation Rules for Gratuity in India
- Government Employees: Fully exempt from income tax.
- Private Sector Employees: For private-sector employees covered under the Payment of Gratuity Act, 1972, the least of the following is exempt from tax:
- Actual gratuity received
- ₹20 lakh (lifetime limit)
- Eligible amount as per formula
How to Use the Gratuity Calculator on Tradejini
- Select Your Employment Type: Government or Private Sector.
- Enter Basic Salary and DA.
- Specify the Number of Years of Service.
- Click Calculate to view your gratuity amount instantly.
Why Use Tradejini’s Gratuity Calculator?
Tradejini’s Gratuity Calculator is designed to deliver quick, secure, and accurate results. Whether you’re changing jobs, planning retirement, or exploring financial options, this tool provides the clarity you need to make informed decisions about your gratuity payout.
Frequently Asked Questions
Yes, the gratuity calculator is completely free and can be used multiple times without any restrictions.
You need to complete a minimum of 5 years of continuous service with the same employer to be eligible. However, in case of death or disability, gratuity is payable even if the service period is less than 5 years.
Since 4 months is less than 6 months, it will be rounded down. Hence, gratuity will be calculated for 16 years. However, if the duration is 16 years and 6 months or more, it will be rounded up to 17 years.
The maximum gratuity amount that can be paid is ₹20 lakh as per the latest amendments to the Payment of Gratuity Act.
Government employees: Gratuity is fully exempt from income tax.
Private‑sector employees: Gratuity is partially exempt. Exemption applies to the least of:
Actual gratuity received
₹20 lakh (lifetime limit)
Amount calculated under the Payment of Gratuity Act formula
Any amount above the exempt limit is added to your taxable income and taxed as per your applicable income‑tax slab.
Is the gratuity calculator free to use?
Yes, the gratuity calculator is completely free and can be used multiple times without any restrictions.
