Free tool

India gratuity calculator

Estimate gratuity under the Payment of Gratuity Act from the last drawn monthly salary and completed years of service. Indicative only, and every rule is one you can confirm.

Indicative estimate for India only. This is a learning aid, not tax, legal or payroll advice. The statutory rates, ceilings, definitions and eligibility rules behind it change over time and can vary by case, so confirm the current position with a qualified professional or the official source before you rely on any figure. Capstan does not compute statutory payroll. It compiles your payroll inputs and hands a documented export to your payroll partner, who does the statutory maths.

This calculator needs JavaScript to do the arithmetic. The rest of the page works without it, and the methodology below gives every formula in full, so you can rebuild it in a few spreadsheet cells if you would rather own the model yourself.

Estimated gratuity Enter your figures Your figures appear here as you type.

The link carries your figures in the address itself. Nothing is stored on our side.

The working

Measure	Value	How it is worked out
The working appears here once your figures are in.

How the answer is worked out

Every step, in the open, so you can rebuild it in a few spreadsheet cells and disagree with it if you want to. A calculator you cannot check is an ad.

The Act formula

For an establishment covered by the Payment of Gratuity Act, gratuity is fifteen days of wages for each completed year of service, on a month treated as 26 working days. That is the 15/26 factor: gratuity is 15 divided by 26, multiplied by the last drawn monthly salary of basic plus dearness allowance, multiplied by the completed years. The wage base is basic plus DA, not the whole cost to company.

Rounding the years

The Act is commonly read so that service beyond six months in the final year counts as a full year, while six months or less is dropped. So the tool rounds the extra months you enter: six or more rounds the year count up, fewer than six leaves it as the completed years. It shows which it did, because this rounding is one of the points people most often read differently, and your case may be treated another way.

Eligibility and the cap

Gratuity under the Act generally needs at least five years of continuous service, with narrow exceptions, so a service length below that is flagged rather than assumed to qualify. The Act also sets a maximum gratuity that has changed over the years; rather than print a figure that may be stale, the tool leaves the cap as a field you fill in, and applies it only if you enter one.

What this tool does not know

Any current statutory figure. It asserts no maximum, because the cap set by the Act has changed over time, and it asserts no rate: the 15/26 factor is the formula in the Act for a covered establishment, but whether you are covered, how your final wage is defined and how the final part-year is treated can all turn on the specific case. Establishments outside the Act sometimes use a different day count, such as 15/30. Confirm the current position before you rely on any figure.

It is not tax advice, and it does not model the tax treatment of gratuity, which is a separate calculation with its own exemptions. For how gratuity sits inside a cost to company, use the India CTC breakdown calculator. For the wider context, see the guides to full and final settlement and statutory payroll in India. Capstan does not compute statutory payroll.

Questions with complete answers

What formula does this use?

The Payment of Gratuity Act formula for a covered establishment: fifteen days of wages for each completed year of service, on a 26-day month. In numbers, gratuity is (15 divided by 26) multiplied by the last drawn monthly salary of basic plus dearness allowance, multiplied by the completed years of service. Every line is shown in the working.

How are part-years counted?

The Act is commonly read so that more than six months of service in the final year counts as a full year, and six months or less is ignored. The tool follows that: enter the extra months and it rounds up when they reach six. This reading is not universal and your employer or a court may treat a specific case differently, so the tool tells you exactly what it did and asks you to confirm it.

Is there a maximum gratuity?

The Act sets a maximum, but the figure has been revised over the years, so this tool does not print one as fact. Instead it leaves the cap as a field. Enter the current statutory maximum from an official source if you want the capped figure; leave it blank to see the uncapped result. This keeps the tool honest rather than quoting a number that may be out of date.

Do I need five years of service?

Gratuity under the Act generally requires at least five years of continuous service, with narrow exceptions such as death or disablement. If you enter fewer completed years, the tool flags that eligibility may not be met rather than silently assuming it is. Confirm eligibility for the specific case, because the exceptions and the counting of continuous service can be involved.

Is the gratuity figure taxable?

Gratuity has its own tax treatment with exemptions that depend on your category and the amounts involved, and this tool does not model any of it: the figure here is the gross gratuity under the formula, before tax. Treat the tax position separately and confirm it with a qualified professional. Capstan does not compute statutory payroll or tax.