Gratuity Calculator India (2026)
Calculate exact statutory gratuity payout in seconds. Compliant with the 15/26 formula and the ₹20 Lakh tax-free limit for Indian employers and employees.
Calculation Breakdown (15/26 Formula)
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Frequently Asked Questions on Gratuity Rules in India
When does an Indian employee become eligible for gratuity?
Under Section 4(1) of the Payment of Gratuity Act, an employee is eligible for gratuity after completing at least 5 years of continuous service with an organization. In cases of judicial interpretation, 4 years and 240 days of continuous service (4 years and 190 days in mining/underground factories) is considered completion of the 5-year tenure.
Why is 26 used as the divisor instead of 30 in the gratuity formula?
The Payment of Gratuity Act treats a working month as having 26 working days (excluding 4 Sundays). Dividing the monthly Basic + DA by 26 gives the accurate one-day wage of the employee. Multiplying this by 15 computes 15 days of salary for each completed year of service.
What is the maximum tax-free gratuity limit for private sector employees?
The statutory tax-free exemption limit under Section 10(10) of the Income Tax Act is ₹20,00,000 (Twenty Lakh Rupees). Any gratuity paid beyond ₹20 Lakhs is taxable as income in the hands of the employee under 'Salaries'.