Use our free Gratuity Calculator to find out your eligible amount based on salary and service years. No signup required. Simple, fast, and accurate for Indian professionals.
Gratuity Calculator
If you’ve worked for an organisation for more than five years, you’re probably entitled to gratuity—a lump sum paid as a token of appreciation for your long-term service. However, most employees in India either don’t know how much they are eligible for or rely on confusing, ad-heavy tools that offer little clarity.
That’s where the HR Calcy Gratuity Calculator comes in. Built with simplicity, accuracy, and real usability in mind, it allows Indian employees to instantly calculate their gratuity amount without any login, subscription, or complex inputs. Whether you’re retiring, resigning, or just planning ahead, this tool offers everything you need in one place—fast, free, and mobile-friendly.
How to Use the HR Calcy Gratuity Calculator
You don’t need to be a finance expert to use this calculator. In just two simple steps, you can get an instant estimate of your gratuity amount:
- Enter your last drawn monthly basic salary (in INR)
- Enter your total years of service (rounded up as per rules)
Once done, click “Calculate” and your result is displayed instantly.
There’s no need for your PAN, email ID, or phone number. It’s completely anonymous and free of ads or distractions.
What Is Gratuity and Why Is It Paid?
Gratuity is a monetary benefit given by an employer to an employee for services rendered over a long period of time. As per the Payment of Gratuity Act, 1972, any organisation with 10 or more employees must pay gratuity to eligible workers.
It becomes payable when an employee:
- Resigns after at least 5 years of continuous service
- Retires from service
- Faces permanent disability due to accident or illness
- Passes away (paid to nominee)
For private-sector employees covered under the Act, the gratuity amount is calculated using a standard formula based on your basic salary and length of service. The Income Tax Department of India also provides exemptions on the gratuity received, subject to certain limits.
Gratuity Formula: Understanding the Calculation
The most widely used formula for gratuity calculation in India is:
Gratuity = (Basic Salary × 15 × Tenure of Service) ÷ 26
Here’s a breakdown of each component:
| Component | Meaning |
|---|---|
| Basic Salary | Your last drawn monthly basic (may include Dearness Allowance) |
| 15 | 15 days’ salary for every completed year of service |
| Tenure of Service | Rounded up to the nearest year if service exceeds 6 months |
| 26 | Number of working days in a month (as per the Act) |
For example, if your last basic pay is ₹30,000 and you’ve worked for 8 years and 7 months, your eligible service tenure is considered 9 years.
Gratuity = (30,000 × 15 × 9) ÷ 26 = ₹155,769.23
This amount is entirely tax-free if it falls within the exemption limits defined under the Act.
Tenure Rounding: Why 5 Years & 6 Months Matter
One of the most commonly misunderstood rules about gratuity is the rounding-off rule.
According to the Payment of Gratuity Act:
- If you have completed 5 years and 6 months or more, it is considered as 6 years
- If you have completed less than 5 years, you are generally not eligible
- For months beyond full years:
- Less than 6 months is ignored
- 6 months or more is rounded up
This makes a significant difference in final payout and eligibility. Here’s a simple table to illustrate:
| Actual Service Tenure | Counted as |
|---|---|
| 4 years 11 months | Not eligible |
| 5 years 5 months | 5 years |
| 5 years 6 months | 6 years |
| 6 years 8 months | 7 years |
This clarity is automatically built into the HR Calcy Gratuity Calculator, which ensures accurate rounding without user intervention.
Eligibility Criteria for Gratuity in India
Before using a gratuity calculator, it’s essential to understand who qualifies for gratuity under Indian labour laws. The eligibility rules are clearly laid out under the Payment of Gratuity Act, 1972 and apply to both private and public sector employees, with some conditions.
Here are the key eligibility conditions:
- Minimum 5 years of continuous service with the same employer is mandatory for most cases.
- Exceptions are made in cases of death or permanent disability—gratuity is payable even if the 5-year period is not completed.
- The employer must be:
- A company, factory, mine, oilfield, plantation, port, railway company
- Or any establishment employing 10 or more employees on any single day in the preceding 12 months.
Gratuity becomes payable when an employee:
| Event | Gratuity Payable |
|---|---|
| Resigns after 5 years | Yes |
| Retires after 5 years | Yes |
| Death (irrespective of service) | Yes |
| Permanent disability (any time) | Yes |
| Resigns before 5 years | No |
These criteria are often overlooked, but they're crucial in determining your eligibility. A professional-grade calculator, like the one on HR Calcy, accounts for these automatically, so you don’t have to second-guess your inputs.
Tax Implications and Maximum Gratuity Limits
While gratuity is a form of long-term financial benefit, many people are unaware of how it is taxed in India. Thankfully, under Section 10(10) of the Income Tax Act, gratuity is partly or fully exempt from tax, depending on the type of employment.
Tax-Free Limits for Gratuity:
| Employee Type | Maximum Tax-Free Limit |
|---|---|
| Government Employee | Fully Exempt |
| Private (Act-covered) | ₹20,00,000 |
| Private (Non-Act) | Least of the following: |
| - ₹20,00,000 | |
| - Actual gratuity | |
| - (15/26) × salary × years of service |
Important: If you receive gratuity exceeding ₹20 lakh in your lifetime (from one or multiple employers), the excess amount is fully taxable.
The HR Calcy calculator automatically limits your result to ₹20 lakh if you're a private-sector employee covered under the Act. It ensures compliance without the need to reference lengthy legal documents.
Covered vs. Non-Covered Organisations
Understanding whether your employer is covered under the Gratuity Act or not can directly affect how your gratuity is calculated.
Key Differences in Calculation:
| Criteria | Covered Under Act | Not Covered Under Act |
|---|---|---|
| Applicability | ≥10 employees in last 12 months | Any size of establishment |
| Formula Used | (Basic × 15 × Years) ÷ 26 | (Basic × 15 × Years) ÷ 30 |
| Maximum Limit | ₹20,00,000 (tax-free) | ₹20,00,000 (tax-free, but less structured) |
| Legal Backing | Yes (as per the Act) | No statutory compulsion |
If you're unsure which category your employer falls into, it’s safer to assume they are covered if the organisation has ever had more than 10 employees. Public sector undertakings, government offices, and registered private companies are typically covered.
This distinction is one of the reasons many calculators provide incorrect results. HR Calcy resolves this by including a pre-set Act selector and applying the appropriate logic.
Real-World Gratuity Calculation Examples
One of the easiest ways to understand how gratuity works is by looking at practical scenarios. The following examples reflect different types of employees—public, private, and contractual—to demonstrate how gratuity calculation differs based on tenure and employer coverage.
Example 1: Private Sector (Act Covered)
- Basic Salary: ₹40,000
- Service Tenure: 9 years 4 months
- Employer Status: Covered under Gratuity Act
Calculation:
Since 4 months is less than 6, the tenure is counted as 9 years.
Gratuity = (40,000 × 15 × 9) ÷ 26 = ₹207,692.31
Example 2: Public Sector Employee
- Basic Salary: ₹60,000
- Service Tenure: 10 years 8 months
- Employer Status: Government (fully exempt)
Tenure is rounded up to 11 years.
Gratuity = (60,000 × 15 × 11) ÷ 26 = ₹380,769.23
Since the employee is in the public sector, the entire amount is exempt from income tax.
Example 3: Non-Act Covered Employer
- Basic Salary: ₹35,000
- Service Tenure: 6 years 6 months
- Employer Status: Not covered under Gratuity Act
Rounded up to 7 years. Since this is a non-covered entity:
Gratuity = (35,000 × 15 × 7) ÷ 30 = ₹122,500
As per the Act provisions, the denominator changes from 26 to 30 in this case, slightly lowering the final payout.
What Happens After You Calculate Gratuity?
Knowing your eligible gratuity amount is only the first step. Once the calculation is done, here’s what typically happens next:
1. Application Submission
You must apply to your employer within 30 days of retirement, resignation, or the event that triggered eligibility. While many employers initiate this automatically, it’s advised to formally request it in writing.
2. Employer Processing Time
As per the Act, the employer is required to disburse gratuity within 30 days of receiving the application. If delayed, the amount becomes liable for simple interest, as defined in Section 7(3A) of the Act.
3. Tax Treatment
If your total gratuity crosses the ₹20 lakh exemption limit, the excess becomes part of your taxable income for that financial year. Planning your exit and withdrawals accordingly is crucial to avoid higher tax liability.
Benefits of Using a Reliable Gratuity Calculator
Many people underestimate the role of a well-structured calculator. Generic tools often overlook nuances like:
- Whether your employer is covered under the Act
- Rounded tenure based on completed months
- Capped exemptions and tax planning needs
- Pre-formatted compliance with the Gratuity Rules
The HR Calcy gratuity calculator is designed keeping these intricacies in mind. It requires no login, works on all devices, and helps users calculate in seconds without needing financial expertise or HR guidance.
Here's how it compares:
| Feature | Generic Tools | HR Calcy Calculator |
|---|---|---|
| Mobile Responsive | Sometimes | Always |
| Tenure Auto-Rounding | Rarely | Yes |
| Act vs Non-Act Option | Mostly Absent | Yes |
| Tax Limit Alerts | No | Yes |
| No Ads or Popups | Rare | Yes |
The cleaner the interface and the more accurate the output, the higher the trust—and HR Calcy aims to maintain that with every use.
Common Questions About Gratuity in India
Despite being a statutory benefit, gratuity often remains a grey area for many employees. The following frequently asked questions aim to clarify some of the most common doubts related to eligibility, taxation, and payment timelines.
Is gratuity mandatory in India?
Yes, gratuity is mandatory for all organisations covered under the Payment of Gratuity Act, 1972. Any establishment with 10 or more employees in the preceding 12 months must comply with the provisions of the Act. Once covered, even if the number of employees drops later, the Act continues to apply.
Can an employee claim gratuity before 5 years?
In most cases, no. However, gratuity is payable before 5 years in case of:
- Death
- Permanent disablement due to accident or disease
In such cases, the gratuity is calculated based on the actual service tenure without applying the 5-year condition. Nominees or legal heirs can claim the amount by submitting relevant documents.
How is service tenure calculated?
The tenure is determined by counting the total years and months of uninterrupted service. If the months exceed 6, they are rounded up to the next full year. This rule is applied as per Section 2A of the Act, which defines "continuous service".
For example:
- 7 years 2 months = 7 years
- 7 years 7 months = 8 years
This simple logic is already built into the HR Calcy gratuity calculator, ensuring error-free calculations.
When and How Is Gratuity Paid?
The timing and mode of gratuity payment are regulated by law to avoid delays and miscommunication. Once an employee becomes eligible, here's the standard timeline:
Gratuity Disbursement Process
| Stage | Timeline | Authority/Provision |
|---|---|---|
| Employee submits application | Within 30 days of termination | Rule 7(1) |
| Employer issues notice | Within 15 days of receiving request | Rule 7(2) |
| Gratuity paid | Within 30 days of becoming due | Rule 9 |
If gratuity is not paid within the due date, the employer must pay interest from the date of eligibility until the date of payment. This is explicitly mentioned in Section 7(3A) of the Act and protects employees from delayed disbursal.
More details on these rules can be found on the official portal of the Ministry of Labour & Employment.
What to Do If Gratuity Is Denied or Delayed?
Unfortunately, there are instances where gratuity payments are delayed or denied, often due to administrative lapses or disputes. If you face such an issue, here’s what you can do:
- Send a formal written request to your employer stating the due amount and date of eligibility.
- If ignored, approach the Controlling Authority under the Payment of Gratuity Act. You must file Form N to lodge your complaint.
- You can also raise the issue with the Labour Commissioner or approach a labour court.
Delays without valid reasons not only attract interest penalties but may also be considered a punishable offence. The law strongly favours timely payout of gratuity and provides structured grievance redressal mechanisms.
Why HR Calcy Gratuity Calculator Is the Most Reliable Option
While there are many gratuity calculators available online, not all of them offer the accuracy, transparency, and simplicity required by Indian professionals. Many are either tied to investment products or cluttered with advertisements, making them difficult to use. HR Calcy takes a different approach—prioritising user experience and calculation accuracy without unnecessary distractions.
Here’s how HR Calcy stands apart from most online calculators:
| Feature | HR Calcy | Generic Tools |
|---|---|---|
| Act vs Non-Act distinction | Yes | Sometimes |
| Tenure rounding built-in | Yes | Rarely |
| Works without login/signup | Yes | Not always |
| Free from ads and promotions | Yes | No |
| Mobile-first, responsive design | Yes | Limited |
| Auto-check for exemption limits | Yes | Mostly absent |
| Based on official gratuity formula | Yes | Yes (not always) |
Most importantly, the calculator is built on the exact legal structure of the Payment of Gratuity Act, making it fully compliant with Indian labour law and employment norms.
Suggested Use Cases for Employees and HR Teams
The HR Calcy gratuity calculator is designed not just for individuals planning retirement but also for:
- HR departments preparing final settlement statements
- Finance teams estimating liabilities for balance sheets
- Employees considering a job switch who want to understand benefit loss or gain
- Family members of deceased employees calculating claims
This versatility makes it a tool worth bookmarking, especially for those working in HR, payroll, or finance domains. Its utility extends beyond mere numbers—it offers peace of mind and legal clarity.
Structured Planning After Knowing Your Gratuity
Once your gratuity amount is calculated, the next logical step is planning how to use or invest it wisely. Whether you are retiring or switching jobs, a lump sum amount like this can be a cornerstone in your financial roadmap.
Top 3 Ways to Utilise Gratuity:
- Emergency Corpus
Build a financial buffer that can help during medical emergencies or income gaps. - Low-risk Investment
Instruments like senior citizen savings schemes or tax-saving fixed deposits offer stable returns with low exposure. - NPS or Pension Planning
Diversifying part of your gratuity into a pension plan can generate regular post-retirement income. You can explore this further through NPS official site.
Having a clear picture of your gratuity lets you make informed decisions instead of impulsive financial moves. The HR Calcy calculator supports this clarity by giving you a trustworthy starting point.
Final Thoughts: Gratuity Simplified, With Zero Hassle
Understanding gratuity doesn’t have to be complicated. With reliable tools, simplified calculations, and structured guidance, any employee in India can take control of their long-term benefits. The HR Calcy Gratuity Calculator delivers exactly that—speed, simplicity, and legal precision, all in a user-first design.
It helps you:
- Calculate your eligible gratuity within seconds
- Avoid manual formula errors
- Stay compliant with official rules
- Plan for your financial future with confidence
Whether you’re an HR professional or an individual planning retirement, this calculator is a practical, fast, and dependable solution built for modern India.
FAQ
Who is eligible for gratuity in India?
Any employee who has completed at least 5 years of continuous service with an eligible employer can receive gratuity under the Payment of Gratuity Act, 1972.
How is gratuity calculated?
Gratuity is calculated using the formula: (Last Basic Salary × 15 × Years of Service) ÷ 26. Tenure over 6 months is rounded up to the next full year.
Is gratuity taxable?
Gratuity is tax-free up to ₹20 lakh for private sector employees. Government employees receive full exemption. Amounts beyond the limit are taxable.
Do I need to log in or sign up to use the HR Calcy Gratuity Calculator?
No. The HR Calcy gratuity calculator is completely free and does not require any login or signup.
Is the gratuity calculator mobile-friendly?
Yes, the HR Calcy calculator is designed to be 100% mobile responsive and works seamlessly on smartphones, tablets, and desktops.
What happens if gratuity is delayed?
If gratuity is not paid within 30 days, the employer must pay simple interest as per Section 7(3A) of the Gratuity Act.
Can an employee get gratuity before completing 5 years?
Yes, in case of death or permanent disability, the 5-year condition is waived and gratuity becomes payable immediately.
Is the gratuity calculator accurate as per law?
Yes. The HR Calcy calculator uses the official formula and rules as outlined in the Payment of Gratuity Act, 1972.
Please do not enter any spam link in comment box. Thank you!