Gratuity Calculator

You must have completed a minimum of 5 years of continuous service. However, if you have worked for 4 years and more than 6 months (i.e., 4 years 7 months or more), it is rounded up to 5 years under the private sector formula.

Effective January 2024, the statutory maximum gratuity limit is ₹25 lakh for Central Government employees. For private sector and PSU employees, the cap remains at ₹20 lakh under the Payment of Gratuity Act. Amounts above these caps are not protected by law, though some employers may pay higher voluntarily.

For government employees, gratuity received at retirement is fully exempt from income tax. For private sector employees, gratuity up to ₹20 lakh is tax-exempt if received from an employer covered under the Payment of Gratuity Act. Any amount exceeding this may be taxable.

Government employees are calculated based on ½ a month's pay per completed year of service, but strictly limited to a maximum payout of 16.5 times the monthly salary. Formula: (Basic + DA) × Service Years × ½. Private sector employees use: (15 × (Basic + DA) × Service Years) ÷ 26.

Yes. For both government and private sector employees, DA is included in the gratuity formula along with basic pay. HRA, travel allowance, and other allowances are not included.

Yes. The Payment of Gratuity Act, 1972 applies to all establishments with 10 or more employees, including factories, mines, oilfields, plantations, ports, railway companies, shops, and other establishments.