Gratuity Calculator

Indian gratuity from last drawn wages and years of service. You can edit the ceiling. An estimate, not legal advice.

Smart Tips

• Enter last drawn monthly wages. Include dearness allowance. Leave out HRA, bonus, commission, overtime, and other allowances.

• Gratuity is not payable before five years unless employment ended by death or disablement.

• More than six extra months counts as one more year. Six months stays with the completed years.

• The ceiling field starts at ₹20,00,000. Change it if a contract or a later notification uses another cap.

• The formula amount is shown even when the ceiling cuts the payable amount, and even when the five-year rule blocks payment.

• This page is the monthly-rated formula. It does not use the piece-rate average or the seasonal seven-day rate.

The Formula

Gratuity = (wages ÷ 26) × 15 × years

26 = Working days
Monthly wages divided by 26

15 = Days' wages
Per counted year

Years = Counted service
Plus one if months exceed six

Cap = ₹20,00,000
Editable ceiling on the form

Payable gratuity is the formula amount, or the ceiling if the formula is higher, and zero when service is under five years and the ending is not death or disablement. The default ceiling printed in the field is ₹20,00,000.

Key Insights

Fifteen days on 26

Monthly wages are divided by 26, not by 30, then multiplied by 15 and by the counted years.

Five years, with one exception

Under five years, the payable amount is zero unless death or disablement ended the employment.

Six months does not round up

Only a part of a year in excess of six months becomes another year. Rounding does not create the five-year eligibility.

Ceiling you can edit

₹20,00,000 is the notified statutory maximum used as the starting cap. The field is yours to change.

Frequently Asked Questions

For a monthly-rated employee, fifteen days' wages equal last drawn monthly wages divided by 26, then multiplied by 15. That amount is multiplied by the counted years of service.

Section 4(1) of the Payment of Gratuity Act, 1972 requires continuous service of not less than five years. This page treats five years as 60 months. Gratuity is not payable below that unless you mark that employment ended by death or disablement. The Act waives the five-year requirement in that case. This page does not apply court rulings that treat 4 years and 240 days as five years.

A part of a year in excess of six months counts as one more year. Six months does not. Seven months does. That rounding is separate from the five-year rule.

The amount payable does not exceed the ceiling in the field. The default is ₹20,00,000, the amount the Central Government notified on 29 March 2018. You can edit the ceiling. The formula amount is still shown when the cap applies.

Wages in the Act include dearness allowance and exclude bonus, commission, house rent allowance, overtime, and any other allowance. Enter the monthly wages that match that definition. Piece-rated and seasonal employees use different rules, and this page does not apply those.

The formula, the five-year rule, and the six-month rounding are section 4 of the Payment of Gratuity Act, 1972, from the text published by the Ministry of Labour and Employment: https://www.labour.gov.in/static/uploads/2025/06/072a4b7ea8246533c62b96b68a30da53.pdf. That copy of subsection 4(3) still says ten lakh rupees. The Payment of Gratuity (Amendment) Act, 2018 replaced that fixed cap with an amount the Central Government notifies. The Press Information Bureau note of 30 March 2018 says the notification sets the maximum at Rs. 20 lakh: https://www.pib.gov.in/newsite/PrintRelease.aspx?relid=178218. That notified amount is the default ceiling here. As of 14 October 2026, no later Central Government notification raising that statutory ceiling was found, so the default remains ₹20,00,000 and the field stays editable.

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Payable gratuity

Enter wages and service to calculate

Formula amount

Years counted

Note:Monthly-rated formula under the Payment of Gratuity Act. The ceiling starts at ₹20,00,000 and you can edit it. Under five years, gratuity is not payable unless death or disablement ended the job. An estimate, not legal advice.