Gratuity Calculator
The Gratuity Calculator helps you calculate the gratuity payable on retirement/resignation after 5+ years of service. Formula: Last Salary × 15/26 × Years of Service.
Calculation Formula
- P = Principal amount
- r = Annual interest rate (decimal)
- n = Number of years
- t = Compounding frequency per year
How to Use This Calculator
Enter the last drawn salary, interest rate, and time period. The maturity value updates automatically. The chart shows the breakdown between your invested principal and the interest earned.
This calculator is for informational purposes only. Investment returns are illustrative and based on assumed rates that may vary. Market-linked investments carry risk and past performance does not guarantee future returns. Interest rates on small savings schemes are reviewed quarterly by the Government of India. Consult a SEBI-registered financial advisor before making investment decisions.
Frequently Asked Questions
Find answers to common questions about gratuity calculator. Click on any question to expand the answer.
Gratuity is a lump-sum benefit for long-term service. You can calculate your gratuity online using our free gratuity calculator, which uses the official formula as per the Payment of Gratuity Act, 1972.
An employee is eligible for gratuity after completing at least 5 years of continuous service with the same employer. The 5-year rule is relaxed in cases of death or disablement of the employee.
For employees covered under the Act, the formula is: (Last Drawn Monthly Salary / 26) * 15 * Number of Years of Service. The last drawn salary includes basic pay and dearness allowance.
Under the Income Tax Act, 2025, the maximum tax-free gratuity limit is ₹25 Lakhs for employees covered under the Payment of Gratuity Act. For non-government employees not covered under the Act, the exempt limit is ₹20 Lakhs.
Yes, this calculator is updated with the latest gratuity rules under the Income Tax Act, 2025, including the enhanced tax-free limit of ₹25 Lakhs, ensuring your calculations are current and accurate.
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