Gratuity Calculator
Gratuity is one of the few retirement benefits with a fixed legal formula, but most people only think about it once, right before they leave a job. This calculator applies the exact Payment of Gratuity Act formula to your current salary and service, and shows what you’d receive today, plus how much of it is tax-free.
What is a Gratuity Calculator?
A gratuity calculator estimates the lump-sum payment owed to an employee after 5 or more years of continuous service, using the formula set out in the Payment of Gratuity Act, 1972. It accounts for whether your employer is covered under the Act, the statutory rounding rule for partial years of service, and the tax-exempt limits that apply based on whether you’re a government or private-sector employee.
Gratuity Is One Piece of a Bigger Retirement Picture
This calculator estimates gratuity from one employer, at one point in time. Across a career, and across both spouses in a working household, gratuity adds up alongside EPF, NPS, and personal investments, and none of those pieces mean much reviewed in isolation from the rest of the family’s retirement savings.
How WealthNest.AI Helps Beyond This Calculator
WealthNest.AI tracks your retirement-linked benefits, EPF, NPS, and investments, across every member of your family in one place, so a gratuity estimate like this one sits alongside your full retirement picture rather than as a standalone number.
See this alongside every other account your family holds, all in one place. Download the WealthNest.AI app to get started.
Frequently Asked Questions
Generally no, 5 continuous years of service with the same employer is the minimum requirement, except in cases of death or disablement, where this condition is waived.
Additional months of 6 or more round up to the next full year of service; additional months below 6 round down. So 5 years and 6 months counts as 6 years, but 5 years and 5 months counts as 5.
Yes. Under the Payment of Gratuity (Amendment) Act 2018, the tax exemption caps at 20 lakh rupees for covered private-sector employees, 10 lakh rupees for uncovered ones, and has no upper limit for government employees.
Covered employers, typically private-sector organisations with 10 or more employees, use the formula with a 15/26 divisor. Employers not covered by the Act use a different formula with a 15/30 divisor, resulting in a smaller payout for the same service.
WealthNest.AI tracks EPF, NPS, and investment accounts automatically once aggregated. Gratuity itself is typically paid as a lump sum on exit rather than accrued in an account, so it isn't tracked as a running balance, but this calculator helps estimate it alongside your other tracked retirement savings.
