Gratuity calculator
Gratuity under the Payment of Gratuity Act is last drawn basic pay plus DA × 15 × years of service ÷ 26. Enter salary and service to estimate it. Employees usually need 5 years of continuous service to qualify.
Counted as 8 years of service.
Service of more than 6 months in the last year counts as a full year. Estimate only, for employers covered by the Act. The tax-free limit is ₹20 lakh; check current rules before paying.
How gratuity is calculated
Formula: last drawn basic pay + DA × 15 × years of service ÷ 26. The 26 stands for working days in a month, and 15 for fifteen days’ wages per year of service.
Example: basic pay + DA of ₹30,000 and 7 years 8 months of service. The 8 months round up, so service counts as 8 years. Gratuity = 30,000 × 15 × 8 ÷ 26 = ₹1,38,462.
Crew keeps a gratuity provision for every employee in payroll, so you always know what you owe.
