Gratuity Calculator India
Our Gratuity Calculator India is a gratuity formula calculator designed to project your statutory gratuity payout under the Payment of Gratuity Act based on basic salary and tenure.
- Gratuity
- A statutory retirement benefit paid by an employer to an employee for services rendered, mandated under the Payment of Gratuity Act, 1972.
- Statutory Payout Eligibility
- Salaried employees who complete at least 5 years of continuous service are eligible to receive gratuity, calculated as 15/26 of last drawn basic salary per year of service.
Understanding Gratuity Calculations & Rules in India
What is Gratuity? How Does it Work?
Gratuity is a statutory retirement benefit paid by employers under the Payment of Gratuity Act, 1972. It serves as a financial thank you for long service. Employees qualify after completing five years of continuous service with the same employer.
The Statutory Gratuity Formula
For companies covered under the Act, the formula is: Gratuity = (Last Drawn Basic Salary + Dearness Allowance) * 15/26 * Years of Service. The 26 represents working days in a month, and 15 represents half a month of pay.
Tax Exemptions Under Section 10(10)
Gratuity is highly tax-efficient. In India, statutory gratuity is tax free up to a lifetime limit of Rs 20 Lakhs. Any amount received beyond this threshold is taxed according to your normal income tax slab.
Related Tools & Guides: Project your long-term retirement savings including EPF balances with our EPF Calculator or check your immediate paycheck splits with our Salary Breakup Calculator. Learn more in our Complete Guide to CTC and In Hand Salary.
Disclaimer: CTC Calculator provides calculations based on standard Indian payroll and tax slabs (Budget FY 2026-27) for educational purposes. Actual structures and deductions may vary based on company policy. Please consult a Chartered Accountant or tax professional for financial decisions.
Calculation Methodology: Calculations run client-side in your browser using pure JavaScript. No personal salary data is transmitted to our servers or stored. EPF calculations default to 12% of basic salary, gratuity is projected at 4.81% of basic, and Professional Tax is based on selected state boundaries.
Calculation Methodology & Statutory Slabs
Our salary intelligence engine runs entirely local client-side scripts in your browser. No private salary figures or professional parameters are transmitted to external servers or logged, guaranteeing absolute data safety. Calculations align with standard Indian corporate payroll systems and regulatory guidelines:
- Income Tax Slabs (Budget FY 2026-27): Updated to incorporate standard deductions and slabs. Tax calculations default to the New Tax Regime (the national default scheme) but support comparative breakeven projections under the Old Tax Regime. Standard deduction is projected at ₹75,000 for the New Regime and ₹50,000 for the Old Regime.
- Employees' Provident Fund (EPF): Calculated at the statutory rate of 12% of Basic Salary under the Employees' Provident Fund Scheme, 1952. Support is provided for standard capping (restricted to ₹15,000 basic limit, resulting in ₹1,800/month employee contribution) and uncapped contributions.
- Gratuity Provision: Projected at 4.81% of Basic Salary (equivalent to 15/26 of basic salary per year of service) under the Payment of Gratuity Act, 1972. Statutory tax exemption is capped at ₹20 Lakhs.
- Professional Tax (PT): State-wise slabs are based on the latest boundaries and limits enacted by respective state departments.
For more details, please review our Editorial Policy, read our full Disclaimer, or consult a Chartered Accountant for corporate tax planning.
Gratuity Calculator FAQs
Quick answers to common questions about gratuity eligibility and calculations