Gratuity calculator
End-of-service payout and how much is tax-free
Worked example
Using the default values, gratuity calculator gives a gratuity payable of ₹2,01,923.
| Item | Value |
|---|---|
| Wages considered | ₹50,000 / mo |
| Service counted | 7 years |
| Formula | 15/26 × wages × years |
| Gratuity | ₹2,01,923 |
| Tax-free limit | ₹20,00,000 |
| Minimum service | 5 years |
| Eligible | Yes |
What you need
- Last drawn basic + DA
- Completed years
- Extra months
- Employment
Questions
When does gratuity become payable?
After five years of continuous service for permanent employees, or one year for fixed-term employees. The five-year condition is waived on death or disablement.
How much gratuity is tax-free?
Up to ₹20 lakh across your working life for non-government employees. Anything above that is taxed as salary.
Important
A part-year of six months or more counts as a full year. Under the labour codes in force since 21 November 2025, wages mean basic plus dearness allowance and retaining allowance, and must be at least half of total pay.