Gratuity Calculator

Gratuity is a statutory benefit under India's Payment of Gratuity Act (1972), offering a lump-sum payment from your employer upon retirement or separation after completing 5 or more years of continuous service. The calculation follows a fixed formula: (15 × Last Monthly Salary × Years of Service) / 26 days, providing a farewell package that recognizes your years of contribution to the organization. Gratuity serves as an important component of retirement income for salaried employees, often constituting 20-30% of retirement corpus depending on your tenure and final salary. The benefit is capped at ₹20 lakh, and up to ₹10 lakh is entirely tax-free, making it a valuable financial cushion. Understanding your exact gratuity helps you include it in retirement planning, prevents disputes during exit, and allows you to invest the lump sum strategically—splitting between safe instruments (FDs, PPF) and growth assets (equity mutual funds, NPS). Many employees overlook this benefit or receive incorrect calculations; this tool ensures accuracy.