Gratuity Calculator – India (15/26 Formula)
Official 15/26 formula. Basic + DA only.
Formula: (Basic + DA) × 15 × Years / 26. Tax-free up to ₹20 lakh (subject to current rules).
What is Gratuity?
Gratuity is a lump sum paid by an employer as a thank-you for long service. In India, employees covered by the Payment of Gratuity Act are normally eligible after completing five years of continuous service, though the rules differ in some cases such as death or disablement. The standard formula for covered employees uses 15 days of wages for each completed year.
Formula
Gratuity = (15 ÷ 26) × Last drawn monthly salary (basic + DA) × Years of service. Service of more than six months in the last year is usually rounded up to a full year.
Worked example
Your last drawn basic plus DA is ₹50,000 per month and you have served 10 years. Gratuity = 15 ÷ 26 × 50,000 × 10 = about ₹2,88,462.
Frequently asked questions
Why is 26 used in the formula?
The formula treats a month as 26 working days, so 15 days of wages is 15 ÷ 26 of a month's salary.
Which salary is used?
Basic salary plus dearness allowance. HRA, bonuses and other allowances are normally excluded.
Is there a limit on gratuity?
There is a statutory ceiling on the amount for covered employees, and tax exemption rules apply too. Check the current limits with your employer or the Government of India labour ministry.
Do I get gratuity if I serve less than 5 years?
Usually not, except in cases such as death or disablement. Employers not covered by the Act may follow their own policy.
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Results are estimates for information only and are not financial, tax or legal advice.