Calculators · Tax
Gratuity calculator
Estimate your gratuity and how much of it is tax-free.
More than six months counts as a full year.
Gratuity
₹3,46,154
For 10 years of service
- Years counted
- 10
- Tax-free
- ₹3,46,154
- Taxable
- ₹0
Tax-free up to ₹20 lakh across your whole career, including gratuity from earlier employers.
How it works
Employees covered by the Code on Social Security, 2020 (in force from 21 November 2025, replacing the Payment of Gratuity Act) receive 15 days' wages for every year of service, with a month counted as 26 working days. A final part-year of more than six months counts as a full year.
Wages means basic pay plus dearness allowance; under the new labour codes it must be at least half of your total pay. Employees not covered by the law get half a month's wages for each completed year.
Up to ₹20 lakh of gratuity is tax-free for non-government employees, across all employers in your career. Government employees' gratuity is fully exempt.
Formula
Gratuity = Last wages × 15 × Years of service ÷ 26
- Last wages — last month's basic pay + dearness allowance
Questions
Who is eligible for gratuity?
Employees with at least five years of continuous service. Fixed-term employees qualify after one year under the new labour codes, and the minimum does not apply on death or disablement.
Why is the month taken as 26 days?
The law counts a month as 26 working days, so 15 days' wages is 15/26 of a month's pay.
Is gratuity taxable?
For non-government employees, gratuity is tax-free up to ₹20 lakh in a lifetime; anything above is taxed as salary. For government employees it is fully exempt.
Results are estimates for planning, not tax, legal or investment advice. Rates and rules were checked on 4 October 2026; confirm the figures that apply to you with your bank, fund house or tax adviser.