How much gratuity will you receive? Calculate your exact payout in seconds
Gratuity is a lump sum payment made by an employer to an employee as a token of appreciation for their long service. It is governed by the Payment of Gratuity Act, 1972 and is payable when an employee completes at least 5 years of continuous service.
Gratuity is your right — not a bonus. Every salaried employee in India is entitled to it after 5 years.
Which formula applies depends on whether your employer falls under the Payment of Gratuity Act (organisations with 10+ employees).
Gratuity at ₹50,000 Basic+DA, Act-covered employer:
| Years of Service | Gratuity (Act-covered) | Gratuity (Not covered) | Taxable Amount |
|---|---|---|---|
| 5 years | ₹1,44,231 | ₹1,25,000 | ₹0 |
| 10 years | ₹2,88,462 | ₹2,50,000 | ₹0 |
| 15 years | ₹4,32,692 | ₹3,75,000 | ₹0 |
| 20 years | ₹5,76,923 | ₹5,00,000 | ₹0 |
| 25 years | ₹7,21,154 | ₹6,25,000 | ₹0 |
| 30 years | ₹8,65,385 | ₹7,50,000 | ₹0 |
*All amounts well below ₹20 lakh tax exemption limit. Tax column assumes no other gratuity received in career.
If you have 14 years and 7 months of service, banks round it UP to 15 years (since ≥6 months rounds up). But 14 years 4 months rounds DOWN to 14 years. Plan your resignation date accordingly — leaving even a month early can cost you one year of gratuity!
The tax exemption limit of ₹20 lakh applies to total gratuity received from all employers during your lifetime. Amounts above ₹20L are added to your income and taxed at your applicable slab rate. For government employees, the entire gratuity is usually tax-free.
You must complete 5 continuous years of service to be eligible. The only exceptions: death or disability — gratuity is paid to nominees regardless of tenure.
Employer must pay gratuity within 30 days of separation. If delayed, they owe simple interest at 10% per annum on the unpaid amount.
Gratuity can be fully or partially forfeited if the employee is terminated for willful omission/negligence causing financial loss to the employer, or for acts involving moral turpitude (proven in court).
As per the Act, gratuity cannot exceed ₹20 lakh. However, employers can voluntarily pay more — the extra amount is taxable. Govt employees get higher limits under separate rules.
