Gratuity calculator — your payout after 5+ years of service.
Gratuity under the Payment of Gratuity Act 1972: 15 days of last-drawn basic+DA per year of service, divided by 26 working days, for any employee with 5+ years of continuous service. Up to ₹20 lakh tax-free for private employees (fully exempt for govt/PSU).
Your details
Rules: ≥ 5 years continuous service required (waived on death or disability). Fraction ≥ 6 months rounds up to full year (7.6 years → 8 for the formula).
The formula
Gratuity = (last_basic + DA) × 15 / 26 × years_of_service — 15 days' salary per year of service — ÷ 26 days (standard working days per month) — For govt employees: 30 days' salary per year (so × 15/26 becomes × 1)
Tax treatment
- Govt + PSU employees: fully tax-free, no cap.
- Pvt (covered under the Act): exempt = least of (formula, actual, ₹20L).
- Pvt (not covered): exempt = least of (half-month-salary × years, actual, ₹20L).
The ₹20 lakh cap was last raised in 2019 (from ₹10L). Applies to private-sector employees.
When you're entitled
- • 5+ years continuous service with the same employer. Broken service (resignation, re-joining) typically doesn't count — you start over.
- • Death or disability — 5-year rule waived, gratuity payable from day 1.
- • Fractional years — 4 years 6+ months rounds up to 5 years (and qualifies). 4 years 5 months doesn't.
- • Covered establishments — 10+ employees. Smaller firms may not be mandated but often pay voluntarily.
Payment timeline
- • 30 days from your last working day — employer must pay (or start the process).
- • Delays attract simple interest at RBI savings bank rate + 2%.
- • Non-payment is cognisable — you can approach the Labour Commissioner.
- • Form F nomination should be filed early in your tenure — goes to nominee on death.
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Research tool · not investment advice.
Axel Markets is an information + analytics product. We are not a SEBI-registered Research Analyst (RA) or Investment Adviser (IA). Nothing on this page is a buy, sell, or hold recommendation. Past performance is not indicative of future returns. Verify all data against the authoritative source (NSE, BSE, AMFI, SEBI, company RHP / factsheet) before acting. Gratuity payout depends on your employer's formal structure (Act-covered vs not). Some private firms have gratuity trusts that settle slightly differently. Always cross-check with your HR.