Gratuity calculator
Gratuity is 15 days of your last drawn basic for every year you served, paid when you leave after five years. Companies that include gratuity in CTC provision 4.81% of basic for it every month, which is exactly this formula spread across the year.
Your service
Gratuity for 7 counted years
₹2,01,923
15 ÷ 26 × ₹50,000 × 7 years. Entirely tax free, within the ₹20 lakh lifetime limit.
- Tax free
- ₹2,01,923
- Taxable
- ₹0
- Monthly CTC provision
- ₹2,405
What it grows to
| Years served | Gratuity | Tax free |
|---|---|---|
| 5 | ₹1,44,231 | ₹1,44,231 |
| 7 | ₹2,01,923 | ₹2,01,923 |
| 10 | ₹2,88,462 | ₹2,88,462 |
| 15 | ₹4,32,692 | ₹4,32,692 |
| 20 | ₹5,76,923 | ₹5,76,923 |
| 25 | ₹7,21,154 | ₹7,21,154 |
| 30 | ₹8,65,385 | ₹8,65,385 |
Assumes your basic stays at today's figure. Gratuity is computed on the last drawn basic, so raises lift every year retroactively.
Questions
Under the Act, five years of continuous service is required, except on death or disablement. Fixed term employees vest after one year under the new labour codes. Some employers pay voluntarily after 4 years and 240 days, following the Madras High Court view, but that is their policy, not the law.
Six months or more in the final year rounds up to a full year. Seven years and eight months counts as eight years.
Gratuity is tax free up to ₹20 lakh across your whole career for private employees covered by the Act. Anything above that is taxed as salary in the year received.