How to Calculate Gratuity in India

Gratuity is a lump sum an employer pays you as a thank-you for long service, usually when you leave a job. It's a valuable benefit many employees overlook.

Who is eligible?

Under the Payment of Gratuity Act, you're generally eligible after 5 years of continuous service with the same employer (with some exceptions for death or disability).

The formula

Gratuity = (Last drawn salary × 15 × years of service) ÷ 26

Here "salary" means basic pay plus dearness allowance, and 26 represents the working days in a month. For example, ₹50,000 salary and 7 years → (50,000 × 15 × 7) ÷ 26 ≈ ₹2,01,923.

Estimate yours

Use our free Gratuity Calculator. Planning your finances? See the Salary Calculator and Savings Goal Calculator too. This is general information, not financial advice.