Gratuity Calculator

Gratuity = (Last drawn basic + DA) × 15 × Years of service / 26. The 26 represents 26 working days per month. The cap is ₹20 lakh as per the latest notification of the Payment of Gratuity Act 1972. Eligible after 5 years of continuous service in covered establishments.

Yes — Section 10(10) exempts gratuity up to ₹20 lakh for non-government employees retiring after 5+ years. Government employees, PSU employees and local-authority employees get full exemption (no ₹20 lakh cap). The ₹20 lakh cap was raised from ₹10 lakh in 2018 and again in March 2024.

5 years of continuous service in a covered establishment is the minimum. The employer may still pay gratuity for shorter service at their discretion. On retirement / death / disablement, the 5-year rule does not apply.

Yes — gratuity is payable on retirement (including voluntary retirement) and on death / disablement, provided 5 years of service have been completed in a covered establishment (10+ employees or notified).

Government employees covered under NPS do not get gratuity automatically — the CCS (Pension) Rules apply separately. Private-sector NPS subscribers get gratuity as per the Payment of Gratuity Act. Calculator handles both via the employer-type selector.

Yes — employers may create an annual provision in P&L (under Section 43B(b) of the Income Tax Act for non-government employers) or fund through a gratuity trust (private-sector irrevocable trust). Both approaches allow pre-tax accumulation; calculator focuses on the employee-side math, not the funding.