Gratuity calculator
Enter the last drawn basic + DA and the two dates. You get the amount payable under the Payment of Gratuity Act and every step of the working, so you can check it line by line.
Gratuity payable
₹—
Your result appears here, with the service period, the years counted, the formula and the ceiling.
Rules used: Payment of Gratuity Act, 1972, section 4, as Workdome's payroll applies it in every full and final settlement. Ceiling ₹20,00,000, as notified by the central government in 2018. Checked against Workdome's own computation on 17 October 2026. The Code on Social Security, 2020 brings gratuity under a new definition of wages and makes fixed-term employees eligible after one year of service; where it applies, the amount can differ from this calculation. This is an estimate for planning, not legal advice, and an employer's own policy can pay more than the Act.
How it is calculated
Fifteen days' wages for every year of service
Gratuity under the Act is 15 days of the last drawn wages for each completed year. For a monthly salary, the Act divides the monthly wage by 26, the working days in a month, and multiplies by 15.
The formula
- Amount
- 15 ÷ 26 × last drawn monthly (basic + DA) × years counted
- Wages
- Basic pay plus dearness allowance in the last month. HRA, bonus, overtime and other allowances are not counted.
- Ceiling
- ₹20,00,000. Anything above it is not payable under the Act.
Years counted
- Service
- From the date of joining to the last working day, both days included.
- Part year
- More than six months rounds up to a full year. Exactly six months does not.
- Eligibility
- Five years of continuous service. On death or disablement the period does not apply.
Worked example. Basic ₹30,000 and DA ₹5,000, joined 1 April 2021, last working day 31 March 2026. That is exactly five years, so five years count: 15 ÷ 26 × ₹35,000 × 5 = ₹1,00,961.54.
Questions
Gratuity questions HR teams get asked
Is gratuity paid if someone resigns before five years?
No. The Act needs five years of continuous service, whether the person resigns, retires or is let go. The exception is death or disablement, where gratuity is paid whatever the length of service. Some employers count four years and 240 days as five years, following court rulings; the calculator has that option.
How is a part year counted?
A part year of more than six months counts as a full year. Six months exactly, or less, does not count. Someone with 7 years and 6 months gets 7 years; someone with 7 years, 6 months and 1 day gets 8.
Which salary is used?
The last drawn monthly basic pay plus dearness allowance. House rent allowance, bonus, commission, overtime and other allowances are left out. If the salary changed in the last month, it is the rate in force on the last working day.
Why 26 and not 30?
Gratuity is 15 days' wages per year of service, and for a monthly salary the Act says to divide the monthly wage by 26 and multiply by 15. A month is taken as 26 working days, not 30 calendar days.
What is the maximum gratuity?
₹20,00,000, the ceiling the central government notified in 2018. The calculator shows the full working above the ceiling and then caps the amount. An employer can pay more under its own policy or a contract.
Does the Act apply to every employer?
It applies to every factory, mine, oilfield, plantation, port and railway company, and to shops and other establishments with ten or more employees. Once it applies, it keeps applying even if the headcount later falls below ten.
Gratuity, done in the settlement
Workdome works out gratuity, leave encashment and notice recovery for every leaver from the salary structure on file, and shows how each figure was reached on the full and final statement.