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Gratuity calculator

Estimate gratuity using the common statutory-style formula and a rough split between taxable and exempt amounts for covered employers.

Last updated: March 2026FY 2024-25 (AY 2025-26) tax slabs in engine

How SalaryExit calculates estimates (methodology, FY scope, and limits).

Legal/tax treatment can differ — this is a planning estimate (see accuracy card).

Required inputs

  • Last drawn monthly salary (Basic + DA, ₹)
  • Years of service (can be fractional for rough estimates)
  • Whether covered under Payment of Gratuity Act (affects exempt cap modeling)

Use the definition consistent with your employer’s gratuity policy.

e.g. 6.5

Employer coverage

If you uncheck this, we do not assume the statutory exempt cap.

Enter service details to estimate gratuity and a rough exempt/taxable split.

Assumptions used by this estimate

  • Formula: (15/26) × last drawn monthly salary × years of service.
  • Tax-exempt slice for covered employers is capped at ₹₹20,00,000 in this model.
  • Eligibility under the Act generally requires 5+ years (exceptions exist).

Worked example (same engine as live calculator)

Illustrative inputs: last drawn ₹1,00,000 per month, 7 years of service, covered employer. Estimated gross gratuity ₹4,03,846; exempt (rough) ₹4,03,846; taxable (rough) ₹0 — figures are produced by the same function as the live calculator above.

FAQ

Is the taxable amount my final tax?

No. Tax on gratuity depends on employer type, exemptions, and salary history. Consult a CA for exact treatment.

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