For Indian employees & employers
Gratuity calculator
Estimate your gratuity, then check the service and wage assumptions behind it.
Illustrative gratuity amount
₹1,15,385
Service condition met on the information entered
- Formula
- 15 × ₹40,000 × 5 ÷ 26
- Amount before covered-employment ceiling
- ₹1,15,385
- Illustrative remaining tax exemption
- ₹1,15,385
- Illustrative taxable excess
- ₹0
Ordinary covered service rounds up only beyond six extra months. Direct fixed-term contracts use a pro-rata illustration after one year; days use a 365-day estimate. Non-covered amounts use completed years and the ten-month average salary. The revised wage definition applies from 21 November 2025.
How this estimate works
Does 4 years and 240 days automatically qualify?
No universal automatic entitlement is assumed here. Continuous-service tests, working days, jurisdiction and applicable judgments matter. For a four-year regular-employment case, the calculator displays an illustration and flags eligibility for review instead of rounding the employee into eligibility.
Is the formula still based only on basic plus DA?
Use qualifying wages under the applicable law. The Labour Ministry says the revised wage definition applies from 21 November 2025, including to gratuity payable after that date. Basic plus DA alone may omit required wage adjustments. For a non-covered voluntary payment, the tax formula uses the relevant ten-month average salary.
How are service and the ₹20 lakh limit handled?
For ordinary covered employment, a part-year longer than six months adds a formula year; exactly six months does not. Fixed-term service uses a pro-rata illustration after one year. The model applies the general private-sector ₹20 lakh ceiling, separately showing remaining tax exemption after prior claims. Better contractual benefits and government-service rules may differ.
Official sources
- Ministry of Labour: March 2026 wage, ESI and gratuity FAQ
- India Code: Social Security Code, gratuity and continuous service
- Income Tax Department: retirement benefits and gratuity exemption
Sources checked by the AionHRMS product team on 2026-09-26. This planning tool is not a substitute for a payroll or tax review of your circumstances.
More tools for your working day
Bring attendance and payroll together.
Explore AionHRMS for attendance, leave and salary workflows across your team.