Regional Notice: This calculator uses India's financial regulations, but you are viewing it in USD. for the most accurate local experience.
Gratuity Calculator
Retirement & FIRE
What is a Gratuity Calculator?
A Gratuity Calculator computes the lump sum amount paid by an employer to an employee in India as a token of appreciation for rendering continuous service for a specified minimum period (typically 5 years or more). It acts as a significant retirement or resignation benefit.
How is Gratuity Calculated?
Under the Payment of Gratuity Act, 1972, the formula depends on whether the employer is covered under the act. For covered employers, the calculation strictly relies on the last drawn basic salary and the total number of years served.
The Official Formula
Gratuity = (15 × Last Drawn Salary × Tenure in Years) / 26
"Salary" includes Basic Salary + Dearness Allowance (DA).
Key Eligibility Rules
- 5-Year Rule: You must have completed at least 5 full years of continuous service with the same employer to be eligible.
- Rounding Off: If you serve 5 years and 7 months, it is rounded up to 6 years. If you serve 5 years and 4 months, it is rounded down to 5 years.
- Death or Disability: The 5-year requirement is waived in cases of death or disablement of the employee.