Who is eligible for gratuity?

Employees who complete 5+ years of continuous service with an organisation covered under the Payment of Gratuity Act, 1972.

What is the gratuity formula?

Gratuity = (Last drawn Basic + DA × 15 ÷ 26) × Years of service. Maximum tax-free gratuity is ₹20 lakh.

Government employees: fully tax-free. Private employees: tax-free up to ₹20 lakh in lifetime; excess is taxed at slab rate.

🔥 Today's Offer: Apply for any credit card & get ₹500 extra cashbackApply Now →

See how much gratuity you are entitled to.

Reviewed by Nisha SLast verified 6 Sept 2026RBI-compliantFact-check policy

Last Drawn Salary (Basic + DA)₹50,000

₹5K₹5L

Years of Service10 yrs

140

Gratuity Amount₹2,88,462

Compare rates across 50+ banks.

Personalised plan in 60 seconds.

As per the Payment of Gratuity Act, employees are entitled to gratuity after 5+ years of continuous service.

Gratuity = (Last Salary × 15 / 26) × Years of Service

Everything you need to know about the Gratuity Calculator.

Results are illustrative estimates for planning. Actual figures depend on bank/AMC terms, taxes and market conditions.