WebSoftOSGratuity calculator
Under the Payment of Gratuity Act, gratuity = last drawn basic + DA × 15 × years of service ÷ 26. Service of more than six months in the final year is rounded up to a full year. It is payable after five years of continuous service (earlier on death or disablement), and up to ₹20 lakh is tax-free for non-government employees.
Result
| Years counted | 8 |
|---|---|
| Formula | Wage × 15 × years ÷ 26 |
| Gratuity payable | ₹1,84,615 |
| Tax-exempt (up to ₹20 lakh) | ₹1,84,615 |
| Taxable portion | ₹0 |
| Eligible on resignation? | Yes (5 years of continuous service) |
Gratuity is payable before 5 years only on death or disablement. Tax exemption shown applies to non-government employees; government employees are fully exempt.
Gratuity formula
- Covered employers: Wage × 15 × years ÷ 26, with more than 6 months rounded up to the next year.
- Not covered: Wage × 15 × completed years ÷ 30 (half a month per completed year).
Frequently asked questions
Is gratuity payable before 5 years?
Only on death or disablement. Courts have held that 4 years and 240 days of service can count as 5 years in some cases.
What is the maximum tax-free gratuity?
₹20 lakh over a lifetime for non-government employees; government employees are fully exempt.
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