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Gratuity Calculator India (2026)

Instant, legal calculation compliant with Section 4(2) of the Payment of Gratuity Act, 1972. Calculates non-taxable and taxable gratuity entitlements with the ₹20,00,000 statutory cap.

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How is Gratuity Calculated in India? (Statutory Formula)

Under Section 4(2) of the Payment of Gratuity Act, 1972, gratuity for covered establishments is computed as: Gratuity = (15 × Last Drawn Basic Salary + DA × Completed Years of Service) / 26. Gratuity is mandatory after 5 years of continuous service, with tax exemption up to ₹20 Lakhs.

₹50,000
₹10,000 ₹2,50,000 ₹5,00,000
6 Years
1 Year 20 Years 40 Years
Formula: Gratuity = (15 / 26) × Last Basic Salary × Completed Years. In accordance with Indian labour statutes, 26 days represents working days per month.
Calculation Breakdown

Total Statutory Gratuity Entitlement

₹1,73,077
Formula Applied: (15/26) × ₹50000 × 6y
Statutory Cap Status: Within ₹20 Lakhs Limit
Income Tax Status: 100% Tax-Exempt (Sec 10(10))
Mandatory Payment SLA: 30 Days from Exit
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All calculators, statutory walkthroughs, and regulatory interpretations published on this portal undergo peer review by our Senior Statutory Retainer Panel. Content is audited for exact conformance with the Employees' Provident Funds Act, 1952, EPS Scheme 1995, and official Ministry of Labour & Employment Gazette Notifications (including S.O. 5109(E)).

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