Gratuity Calculator in Ahmedabad
Gratuity is a lump sum your employer pays for long service — payable after 5 years under the Payment of Gratuity Act, 1972. Enter your last drawn monthly salary (basic + dearness allowance) and your years of service to see your gratuity, calculated as 15/26 of a month’s salary for each completed year, capped at ₹20 lakh.
- 100% free
- No sign-up
- Private — on your device
Your partner in prosperity
Plan your tax-saving investments
Talk to an AMFI-registered Mutual Fund Distributor (ARN-354187) in Ahmedabad. Free, no-obligation guidance tailored to your numbers. We'll bring up your scenario — Gratuity payable: ₹3,46,154.
How it's calculated
The formula
Gratuity = (15 ÷ 26) × last drawn monthly salary (basic + DA) × completed years of service, capped at ₹20 lakh under the Payment of Gratuity Act, 1972.
Assumptions
- You are covered by the Payment of Gratuity Act (most establishments with 10+ employees).
- Years of service are whole completed years (a part-year over 6 months rounds up).
- Salary means last drawn basic + DA only.
Sources
Real-world scenarios
See exactly how the numbers play out in the situations people actually face — so there are no surprises before you commit.
₹60,000 salary, 10 years of service
With a last-drawn basic + DA of ₹60,000 and 10 years of service, your gratuity works out to about ₹3.46 lakh — roughly ₹34,600 for every year you served. The formula rewards both a higher final salary and a longer stint with the same employer.
The five-year rule (and the 6-month catch)
Gratuity is payable only after five completed years of continuous service — leave at 4 years 11 months and you get nothing. But a part-year beyond six months counts as a full year, so 10 years and 7 months is treated as 11 for the calculation.
The ₹20 lakh tax-free cap
Gratuity is tax-free up to a lifetime limit of ₹20 lakh for private-sector employees; anything above that is added to your income and taxed. For most careers the payout stays well under the cap, making it a genuinely tax-free reward for loyalty.
Illustrative figures on standard reducing-balance / compounding assumptions — your actual numbers may vary.
Frequently asked questions
The details worth knowing before you rely on these numbers.
How is gratuity calculated?
Under the Payment of Gratuity Act, gratuity = (15 ÷ 26) × last drawn monthly salary (basic + DA) × number of completed years of service. The 15/26 represents 15 days of wages for each year, based on a 26-day working month.
When am I eligible for gratuity?
You are eligible after completing 5 continuous years with an employer. The 5-year condition is waived if service ends due to death or disablement. A part-year of more than 6 months counts as a full year.
Is gratuity taxable?
For employees covered by the Act, gratuity is tax-free up to ₹20 lakh (the current exemption limit). Any amount above this, or for non-covered employees beyond their limit, is taxable as salary income.
What salary is used to calculate gratuity?
Only your last drawn monthly basic pay plus dearness allowance (DA) is used — not your full CTC, HRA or other allowances.
Is there a maximum gratuity amount?
Yes. The maximum gratuity payable and tax-exempt under the Act is currently ₹20 lakh, regardless of salary or years of service.
What if I leave the job before completing 5 years?
Under the Payment of Gratuity Act, gratuity is normally payable only after five continuous years of service, so leaving earlier usually means no gratuity — the main exceptions are exit due to death or disablement, where the five-year rule is waived. A part-year of more than six months counts as a full year once you are eligible.
Is gratuity taxed the same for government and private employees?
No. Gratuity received by central or state government employees is fully exempt from tax. For private-sector employees covered by the Act, it is exempt up to ₹20 lakh, with anything above that taxed as salary. The calculator estimates the amount; how much is tax-free depends on your category.
Can my employer delay or deny my gratuity?
Gratuity must generally be paid within 30 days of it becoming due, and delay can attract simple interest. An employer can forfeit it only in specific cases, such as termination for proven wilful misconduct causing loss. If genuine dues are withheld, you can escalate to the controlling authority under the Act.
Is this gratuity calculator free?
Yes — it is free, needs no sign-up, and runs entirely in your browser. Your inputs stay on your device unless you choose to speak with an Apex TechFin advisor.
Explore all our free financial calculators
Bring every part of your money into one view — loan EMIs, SIP returns, retirement, tax and insurance cover. Every tool is free, instant and private.