Gratuity Payout Calculator (Payment of Gratuity Act)
Compute statutory gratuity entitlement under the Payment of Gratuity Act 1972 with the 15/26 working-day formula and ₹20 Lakh tax exemption limit.
D BIZ Gratuity Calculator
Calculate mandatory end-of-service gratuity payout based on tenure and last drawn basic salary.
Service Details
Gratuity = (15 × Last Drawn Basic × Years of Service) ÷ 26
Gratuity Entitlement
Statutory Gratuity Mathematical Formula
As of September 30, 2026, the Payment of Gratuity Act 1972 applies to every factory, mine, oilfield, plantation, port, railway, and commercial establishment employing 10 or more persons on any day of the preceding 12 months. Gratuity up to ₹20,00,000 received by non-government employees is 100% exempt from income tax under Section 10(10)(ii).
A month is considered to have 26 working days (excluding 4 Sundays). Gratuity is calculated at 15 days' wages for every completed year of service. If service in the final year exceeds 6 months, it is rounded up to the next full year.
How to Use the Gratuity Payout Calculator (15/26 Formula)
Enter Last Drawn Basic Salary
Input your last drawn monthly Basic Pay plus Dearness Allowance.
Specify Total Service Tenure
Enter completed years and months of continuous employment with the organization.
Compute Gratuity Amount
The calculator applies the 15/26 formula and highlights tax-exempt vs taxable components.
Consult D BIZ for Settlement Advice
Ensure your employer calculates statutory dues accurately and complies with labor laws.
Key Highlights & Capabilities
Frequently Asked Questions (FAQs)
When does an employee become legally eligible for gratuity in India?
Under Section 4(1) of the Payment of Gratuity Act, an employee is eligible for gratuity upon termination of employment after rendering continuous service for not less than 5 years (except in cases of death or disablement, where the 5-year condition is waived).
Is gratuity taxable in India?
Gratuity received by central/state government employees is completely tax-free. For private sector employees covered under the Payment of Gratuity Act, gratuity is tax-free up to a statutory lifetime limit of ₹20,00,000 under Section 10(10).
What salary components are included in gratuity calculation?
Only 'Last Drawn Basic Salary' and 'Dearness Allowance (DA)'. Other allowances such as HRA, Special Allowance, conveyance, medical allowances, and performance bonuses are excluded.
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