Estimate gratuity payable based on your salary and years of service
The Act applies to organisations with 10+ employees
Minimum 5 years to be eligible
Gratuity is a lump-sum benefit paid by an employer to an employee as a token of appreciation for their services. Under the Payment of Gratuity Act, 1972, it is payable to employees who have completed at least 5 years of continuous service.
Gratuity = (15 × Last Salary × Years) / 26
15 days' wages for every completed year (26 working days/month)
Gratuity = (15 × Last Salary × Years) / 30
15 days' wages based on 30 calendar days/month
Entire gratuity amount is tax-exempt.
Exempt up to the least of: (a) ₹20,00,000, (b) actual gratuity received, or (c) 15/26 × last salary × years of service.
Exempt up to the least of: (a) ₹20,00,000, (b) actual gratuity, or (c) half month's average salary × years of service.
Yes, gratuity is payable on resignation, retirement, death, or disability, provided you have completed 5+ years of continuous service.
Service of 6 months or more is rounded up. So 4 years 8 months = 5 years, making you eligible for gratuity.
The maximum tax-exempt gratuity is ₹20,00,000 under current rules. Your employer can pay more, but the excess is taxable.
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