Use the gratuity calculator to know the exact gratuity amount in a few simple clicks!
Gratuity is a monetary benefit paid by an employer to an employee as a gesture of appreciation for their long-standing service. It is not a monthly component of your salary, you can understand as a one-time lump sum payout made to an employee upon resignation, retirement, or death.
In India, gratuity is governed by the Payment of Gratuity Act 1972 and is considered a statutory right for eligible employees which we’ll explain later in the blog. It’s typically considered as a part of your long-term financial planning and retirement savings.
You can think of it as a “thank you” bonus from your employer for your loyalty over the years you worked for them.
A Gratuity Calculator is an online tool that helps you calculate the exact gratuity amount that you’re eligible for, based on the inputs like your last drawn salary and your years of service to an organization.
So instead of you manually applying formulas (and risking miscalculation while doing so), a gratuity calculator helps:
It’s a bummer that many employees miss out on gratuity because they don’t know they’re eligible for gratuity. Don’t be one of them calculate your gratuity online today.
To be eligible for gratuity in India there is a certain criterion:
Exception: In case of death or disability, gratuity is payable even if the employee hasn’t completed 5 years.
To calculate gratuity, you can use the following standard formula:
Gratuity = (15 × Last drawn basic salary + DA × Number of years of service) ÷ 26
Where:
15 = fixed number of days considered for calculation
26 = number of working days in a month
Basic salary + DA = last drawn basic pay + dearness allowance (DA)
Years of service = rounded to the nearest full year
If you worked for 5 years and your last basic salary + DA was ₹25,000:
Gratuity = (15 × 25,000 × 5) ÷ 26 = ₹72,115
Zimyo uses a standard formula for calculating formula gratuity that is given below:
G= N*B*15/26
In the formula, the values represent the following things.
N – Number of years an employee has worked in the organization
B– Last drawn basic salary plus dearness allowance (DA) of an employee
G– Gratuity amount an employee is eligible to receive
To better understand the calculation, let’s take an example. If employee A has worked with the organization for 5 years, his basic salary plus dearness allowance amounts to 25,000. Hence:
The amount of gratuity would be: 5*25000*15/26= 72,115
Here are the most important gratuity rules in India:
Gratuity may feel complex, but with the right understanding and tools like Zimyo you’ll always be in control.
Visit the Zimyo Gratuity Calculator online.
Fill in your last basic salary and DA.
Enter your total years of service (rounded).
Click “Calculate” — your gratuity amount will be displayed in seconds.
The Zimyo Gratuity Calculator is an easy-to-use tool, where you just have to enter the last salary drawn and number of years of service. It gives you an estimate of gratuity an employee would receive after giving five or more years to an organization.
The gratuity calculator shows the gratuity amount within seconds of entering the basic details. It helps an individual to plan his future or retirement according to his need for a maximum amount of return.
An individual can access the gratuity calculator from the comfort of their home or anywhere to get the gratuity amount.
You are a government employee (central, state, or local body).
The lowest of these 3 is tax-free:
Actual gratuity received
₹20 lakhs (maximum limit set by the law)
Gratuity calculated using the formula
Example:
If you get ₹14 lakhs as gratuity, and it’s below the ₹20 lakh limit, it is not taxable.
Private sector employees covered under the Gratuity Act are entitled to gratuity if:
Gratuity in private companies is often part of the Full & Final(FnF) Settlememt So, using a gratuity calculator avoids underpayments and surprises.
HR Tip: Employers should include gratuity projections in their annual financial statements.
Gratuity for central government employees follows the Central Civil Services (Pension) Rules. While the base formula remains the same, some unique provisions apply:
These employees often receive pension + gratuity, making it a critical part of retirement planning.
Yes, gratuity is often included in your Cost to Company (CTC) breakdown. Usually, 4.81% of your basic pay per annum is allocated toward gratuity. However:
Knowing this will help you decode your salary offer and evaluate long-term benefits wisely.
Use the formula:
Gratuity = (15 × Last drawn salary × Years of service) ÷ 26
Or simply use an online Gratuity Calculator.
Tenure of Service Amount payable(gratuity)
Less than a year 2*basic salary amount
1-5years 6*basic salary
5-11 years 12*basic salary
11-20 years 20*basic salary
15 in the formula of Gratuity calculation represents 15 days of salary for each completed year of service.
Gratuity is applicable after 5 years of service
₹20 lakh is the tax-free upper limit
Time beyond 6 months in a year is counted as 1 full year
You must work for at least 5 years continuously, unless you retire early due to accident or illness.
