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Use the gratuity calculator online to know the exact gratuity amount in a few simple clicks!
Gratuity is a lump-sum statutory benefit that an employer pays an employee for continuous service of five years or more, governed by the Payment of Gratuity Act, 1972. It is paid at retirement, resignation, superannuation, or, without the five-year condition, on death or disablement. For most private employees, it forms part of the full and final settlement.
The gratuity calculation formula depends on whether your employer is covered under the Payment of Gratuity Act, 1972:
Employer type | Formula | Divisor logic |
Covered under the Act (10+ employees) | Gratuity = (Basic + DA) × 15 × completed years of service ÷ 26 | 26 = working days in a month; 15 = half a month’s wages per year of service |
Not covered under the Act | Gratuity = (Basic + DA) × 15 × completed years of service ÷ 30 | 30 = calendar-month convention; results in a lower payout |
Basic + DA of ₹40,000, 8 years 7 months of service (rounds to 9 years):
Gratuity = 40,000 × 15 × 9 ÷ 26 = ₹2,07,692
Same salary and tenure, employer not covered:
Gratuity = 40,000 × 15 × 9 ÷ 30 = ₹1,80,000
The 26-day method pays roughly 15% more, which is why coverage status is the first input in our calculator.
Gratuity calculation for private employees follows the covered/not-covered split above. Three things private-sector employees should verify:
Central government employees are governed by the Central Civil Services (Pension) Rules, not the Payment of Gratuity Act; state governments have equivalent rules for their employees. Government gratuity is fully tax-exempt, and the ceiling for central government employees is ₹25 lakh (raised from ₹20 lakh after DA crossed 50% in 2024).
Employee type | Tax treatment |
Government employees | Fully exempt from income tax |
Private employees (covered under the Act) | Exempt up to the least of: (a) ₹20 lakh, (b) actual gratuity received, (c) 15 days’ salary × completed years using the 15/26 method |
Private employees (not covered) | Exempt up to the least of: (a) ₹20 lakh, (b) actual gratuity received, (c) half month’s average salary (average of last 10 months) × completed years |
The ₹20 lakh exemption is a lifetime aggregate across all employers under Section 10(10). Any amount above the exempt portion is taxed as salary income at your slab rate.
Steps to Use Zimyo Gratuity Calculator India 2026
Follow these simple steps to use the online gratuity calculator India 2026 on Zimyo:
Using an online gratuity calculator helps employees quickly calculate their gratuity amount without manual calculations or formula errors.
The Zimyo gratuity calculator India 2026 is a simple online tool that helps employees estimate their gratuity amount in just a few seconds. Users only need to enter their last drawn basic salary, dearness allowance (DA), and total years of service to get an instant estimate.
One of the biggest benefits of using an online gratuity calculator is that it reduces manual calculation errors and saves time. It also helps employees understand their retirement benefits and plan their finances better.
The calculator is useful for:
Today, many employees prefer using an employee gratuity calculator online because it offers fast, accurate, and hassle-free calculations without complicated formulas.
You are a government employee (central, state, or local body).
You are a private sector employee.
HR Tip: Employers should include gratuity projections in their annual financial statements.
For employers covered under the Payment of Gratuity Act, 1972: Gratuity = (Basic + DA) × 15 × completed years ÷ 26. For non-covered employers, the divisor is 30. Service beyond 6 months in the final year rounds up to a full year.
15 is fifteen days’ wages paid for each completed year of service. 26 is the number of working days assumed in a month, used to derive the per-day wage from the monthly Basic + DA.
With Basic + DA of ₹30,000 and 5 years of service at a covered employer: 30,000 × 15 × 5 ÷ 26 = ₹86,538. Enter your own figures in the calculator above for an exact estimate.
Generally no. Exceptions: death or disablement (no minimum tenure; paid to the employee or nominee), and fixed-term employees, who earn pro-rata gratuity after 1 year under the Code on Social Security. Courts have also upheld eligibility at 4 years + 240 days.
The last drawn basic salary plus dearness allowance only. HRA, conveyance, bonus, and other allowances are excluded from the calculation.
Only through forfeiture under Section 4(6) – proven willful damage, violence, or moral turpitude, with due process. Otherwise, unpaid gratuity can be escalated to the Controlling Authority (Assistant Labour Commissioner).
