This tool helps employees estimate gratuity as per the Payment of Gratuity Act, 1972, based on last drawn salary and years of service. Accurate, fast, and compliant with Indian labour laws.
Gratuity is a statutory monetary benefit paid by an employer to an employee as a reward for long-term service. In India, it is governed by the Payment of Gratuity Act, 1972 and becomes applicable after 5 years of continuous service (except in case of death or permanent disability).
Gratuity is calculated based on the employee’s last drawn salary and years of service. It applies to organizations with 10 or more employees and is payable at the time of resignation, retirement, superannuation, or termination. The amount received is subject to income tax exemptions as per applicable rules.
An employee becomes eligible for gratuity after completing 5 years of continuous service with the same employer. Gratuity is payable on resignation, retirement, superannuation, or termination. In case of death or permanent disability, the 5-year condition does not apply.
Employers covered under the Payment of Gratuity Act must register their establishment with the respective labour authority. This involves submitting basic business details, employee strength, and compliance documents. Registration ensures legal compliance and smooth gratuity payouts to eligible employees when required.
This Gratuity Calculator is reviewed and maintained by Thinkogic’s finance professionals to ensure accuracy as per the latest Gratuity Act regulations. Thinkogic is not liable for any decisions or results based on the use of this calculator.
Last updated: January 2026 | Gratuity rates verified as per latest notifications
Input your last drawn monthly Basic Pay plus Dearness Allowance (DA) into the salary field.
Enter the number of Years and Months you have served in the organization.
Click away to instantly see the total Gratuity amount payable to you.
Paid when an employee retires after completing the eligible service period.
Paid when an employee resigns after completing at least 5 years of continuous service.
The Gratuity Calculator uses the standard formula prescribed by the Payment of Gratuity Act, 1972, while also providing the alternative calculation for those not covered.
Gratuity = (15 × Salary × Tenure) / 26
Note: 15 days salary for every completed year.
Most common method. Month is considered as 26 working days. For tenure, >6 months is rounded up to a full year.
Gratuity = (15 × Avg. Salary × Tenure) / 30
Note: Half-month salary for every completed year.
Used for organizations not covered by the Act. Month is 30 days. No rounding up for partial years.
(15 × Last Drawn Salary × Tenure) / 26. "Last Drawn Salary" includes Basic Pay +
Dearness Allowance (DA).