Gratuity Calculator: Estimate Your Retirement Payout

Gratuity is the lump sum your employer pays as a thank-you for long service, governed by the Payment of Gratuity Act. Our gratuity calculator uses the statutory formula (last drawn Basic + DA) x 15/26 x completed years of service. The 15/26 factor treats a month as 26 working days and credits 15 days of salary per year served.

Eligibility essentials

• Minimum service: 5 years of continuous service with the same employer (death or disablement is an exception).
• Completed years: service beyond 6 months in the final year is rounded up to a full year.
• Tax-free limit: up to Rs 20 lakh of gratuity is exempt for covered employees.
• Maximum: many private employers cap calculation at the statutory ceiling unless they pay ex-gratia.

How to plan with it

Enter your current basic plus DA and expected years at exit to see the payout for a job switch, resignation or retirement. A Rs 60,000 basic with 12 years of service yields about Rs 4.15 lakh. Use the result to size your emergency fund for the transition month, since gratuity is typically paid within 30 days of exit after paperwork.

Common mistakes

Do not use CTC or gross salary in the formula, only basic plus dearness allowance. And part-time or sub-5-year stints earn zero statutory gratuity, which this tool flags automatically.