Input type
Retirement Estimator
Gratuity calculator for quick payout estimation
Enter last drawn monthly salary and eligible service years to estimate gratuity amount.
Simple two-input flow
Instant result
Retirement benefit planning
Best for
Exit planning
Output
Total gratuity estimate
Enter gratuity details
Use your latest monthly salary and completed service tenure.
Gratuity calculator – detailed guide
This page is focused on gratuity estimation only. It helps you understand how the Payment of Gratuity Act formula, last drawn salary, completed years of service, five-year eligibility threshold and tax exemption rules can affect the lump sum you may actually receive.
1. The 15 by 26 formula is the starting point for many employees
For employees covered by the Payment of Gratuity Act, the common formula is 15/26 multiplied by last drawn salary and completed years of service, subject to the applicable ceiling and the salary components allowed to be counted.
This calculator uses that logic as the planning baseline. It is most useful when you want a quick estimate of how salary growth or an extra year of service may change the gratuity amount.
2. Salary definition matters as much as the headline formula
Gratuity is not always calculated on total CTC. The relevant salary base is usually tied to last drawn basic pay and dearness allowance, depending on the governing framework.
If the wrong salary base is used, the estimate can be materially misleading. This is why HR policy and salary structure need to be checked before relying on the number.
3. The five-year threshold is a major eligibility checkpoint
In many cases, gratuity eligibility is linked to completing at least five years of continuous service, although the exact treatment of edge cases can depend on facts and applicable rules.
That means someone close to the threshold should treat the estimate cautiously. The amount may look attractive in the calculator but still depend on whether the legal service condition is met.
4. Tax exemption treatment can change the usable payout
Gratuity can be tax-exempt up to prescribed limits depending on employee category and the applicable exemption framework. If the gross gratuity exceeds the exempt amount, the balance may be taxable.
This calculator shows the gross gratuity estimate, not the final tax-adjusted amount. Tax treatment should therefore be checked separately before using the figure for retirement cash-flow planning.
5. Use the result as a settlement estimate, not as a final HR calculation
Employer policy interpretation, service rounding, establishment coverage and statutory amendments can all change the final gratuity payable.
Before resignation or retirement, confirm the counted service, salary basis, ceiling and tax handling from HR or payroll records.
Gratuity FAQ
Does this include tax exemption limits automatically?
No. This page estimates gross gratuity. Tax treatment should be reviewed separately under current tax rules.
Can I use this before completing five years?
You can estimate, but eligibility and payable amount depend on legal conditions and employment terms.
Will employer policy change final payout?
Yes. Internal policy interpretation, payroll components, and statutory compliance can affect actual settlement amount.
Is gratuity always calculated as 15 divided by 26 of salary?
That is the standard planning formula for many employees covered by the Act, but the exact payable amount can still depend on coverage, salary definition and employer rules.
Does this calculator show post-tax gratuity?
No. It shows a gross estimate. Any tax exemption limit and taxable excess need to be evaluated separately.