COMPLIANCE CALCULATOR
Fifteen days' wages for every year served.
The formula is fixed by statute, but two details decide the answer — how a part year is counted, and where the ceiling bites.
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Fields are pre-filled with typical values — type your own or drag the sliders, and everything recalculates instantly. Nothing is sent to a server.
Calculated on FY 2025-26 statutory rates. Indicative only — confirm against current notifications before filing.
Gratuity payable
₹1,81,731
Completed years counted
7 yrs
Computed before ceiling
₹1,81,731
Statutory ceiling
₹20,00,000
Computed gratuity against the statutory ceiling
Full breakdown
Step-by-step calculation
HOW IT WORKS
The formula used
The statutory formula divides monthly wages by 26 working days and pays 15 days per completed year.
(Last drawn basic + DA) × 15 × completed years ÷ 26A part year of six months or more counts as a full yearGenerally five years of continuous serviceCapped at the statutory maximum of ₹20 lakhUNDERSTANDING IT
About the gratuity calculator
Gratuity is a terminal benefit — a lump sum paid when an employee leaves after completing a qualifying period of continuous service. It is a statutory entitlement, not a discretionary payment, and the formula is set by law rather than by employment contract.
Two details decide most disputes. The first is how part years are treated: a period of six months or more generally counts as a full year, while less than six months does not. The second is the wage base — the formula uses basic plus dearness allowance, not gross salary and not CTC.
Employers should track accruing gratuity liability rather than discovering it at exit, because for a long-tenured workforce it can be a substantial balance-sheet item.
Worked example
Take a last drawn basic plus DA of ₹45,000 and seven years of service.
The formula gives ₹45,000 × 15 × 7 ÷ 26, which is ₹3,63,462. This is below the statutory ceiling, so the full amount is payable. Had service been 7 years and 7 months, it would count as 8 completed years and the figure would rise accordingly.
WHY IT HELPS
What this calculator is good for
Apply the statutory formula
The legally prescribed calculation rather than an approximation.
Handle part years correctly
Six months or more rounds up, which materially changes the payout.
See the ceiling effect
For senior long-tenured employees the statutory cap often binds.
WATCH OUT
Common mistakes
These are the errors that most often produce a wrong number.
Using gross salary or CTC instead of basic plus dearness allowance as the wage base.
Dividing by 30 rather than 26 — the statutory formula uses 26 working days.
Rounding part years down when six months or more should count as a full year.
Forgetting that continuity of service carries across transfers within a group.
HR TIPS
Practical guidance
Track accrual, not just payouts
Knowing the liability before an exit avoids a surprise at settlement.
Preserve continuity on transfer
Group transfers should retain the original joining date for gratuity purposes.
Settle with the final payment
Gratuity should flow into full and final settlement rather than being processed separately.
QUESTIONS
Gratuity Calculator — frequently asked
Last drawn basic salary plus dearness allowance multiplied by 15, multiplied by completed years of service, divided by 26.
Generally after five years of continuous service, with statutory exceptions such as death or disablement where the qualifying period does not apply.
Gratuity received is exempt up to statutory limits, with different treatment for government and non-government employees. Amounts above the exemption limit are taxable.
A part year of six months or more is generally counted as a full completed year. Less than six months is not counted.
Results are indicative and computed on FY 2025-26statutory rates using conventional salary-structure assumptions. Your actual figures depend on your employer’s structure, your state and your declarations. Confirm against current notifications before relying on these numbers for filing.
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