Loading…
Loading…
Loading…
Calculate the gratuity payable on leaving a job after 5+ years of service, using the standard Payment of Gratuity Act formula, along with the tax-exempt and taxable portion of the payout.
Last updated 5 September 2026
Basic + DA
Gratuity payable
₹2,88,462
Years used in formula
10 years
Tax-exempt amount
₹2,88,462
Taxable amount
₹0
Basic + dearness allowance, not your full CTC.
A fractional year of 6 months or more rounds up to the next full year, per common practice under the Act.
Gratuity payable, along with how much of it is tax-exempt versus taxable, appears instantly.
Gratuity = (15 × last drawn monthly salary × years of service) ÷ 26
Gratuity typically applies only after 5+ years of continuous service, except in case of death or disability.
(15 × 50,000 × 10) ÷ 26 = ₹2,88,462. Since this is well below the ₹20 lakh statutory exemption limit, the entire amount is tax-free.
Gratuity under the Act generally requires at least 5 years of continuous service with the same employer, with an exception that waives this requirement in case of death or disability.
The ₹20 lakh exemption limit is a lifetime cumulative cap across all employers for a private-sector employee, not a per-job allowance — factor in any gratuity already received tax-free elsewhere.
Central and state government employees receive gratuity fully tax-exempt with no ₹20 lakh ceiling — the cap applies specifically to private-sector employees covered under the Payment of Gratuity Act, which is the case this calculator models.
Employees of some public-sector undertakings and autonomous bodies may fall under different exemption rules depending on their specific service conditions, so check your organisation's classification if you're unsure which rules apply.
Generally yes, under the Payment of Gratuity Act. The 5-year requirement is waived if employment ends due to death or disability.
Some employers include an estimated gratuity accrual in the CTC figure quoted at hiring, but it is only actually paid out when you leave after qualifying service — check your offer letter.
Employers covered under the Payment of Gratuity Act use 26 (accounting for 4 weekly offs a month). Employers not covered by the Act commonly use 30 as a simple monthly divisor — a convention, not a statutory requirement.
Up to ₹20 lakh (cumulative across employers, for private-sector employees) is exempt under Section 10(10). Any amount above that is added to your taxable income.
Basic pay plus dearness allowance at the time of leaving — not your full CTC, and not including allowances like HRA or bonuses.
Not for eligibility itself, provided you meet the 5-year service requirement — gratuity is a statutory right earned through service, not a discretionary payout tied to how employment ends, except in cases of termination for proven misconduct.
This calculator provides estimates for general information only. Results are mathematical calculations based on the figures you enter and standard formulas. Actual bank, loan, deposit and investment products may differ due to fees, rounding conventions, day-count methods and changing rates and rules. Projected investment returns are not guaranteed and you may get back less than you invest. Nothing here is financial, tax or investment advice — verify the actual terms with the relevant institution or a qualified adviser before making a decision. See our full disclaimer.