Payment of Gratuity Act 1972 · s.10(10)

Gratuity calculator

What you are owed on leaving, and how much of it is tax free. Most calculators show only the formula for employers covered by the Act, which overstates it for everybody else.

Your employer

Last drawn basic + DA — per month Years of service — including part years

Exemption already used — gratuity claimed exempt at earlier jobs

How it is worked out

The two things that catch people

The divisor is not the same for everyone. An employer covered by the Act pays fifteen days' wages for each year on a 26-day month — the Act assumes four days off. An employer outside it uses a 30-day month, which is about 13% less for the same service.

Part years round differently too. Under the Act, more than six months counts as a full year and less is dropped. Outside it, only completed years count at all.

The ₹20,00,000 exemption is a lifetime limit, not a per-employer one. Someone who has already claimed ₹12,00,000 exempt at a previous job has ₹8,00,000 of it left, however large this payment is.

Five years of continuous service is normally required before any gratuity is payable at all, except on death or disablement.

While you are here

Income tax calculator Old regime against new, with the rebate and marginal relief applied. HRA exemption calculator How much of your house rent allowance is actually exempt.

When the sums stop being the hard part

We file it for you

A calculator tells you the number. Getting it onto the right form, with the right proofs, before the right date, is the part people ask us for.

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