Gratuity Calculator 2026
Calculate your gratuity using the 15/26 formula, revised wage definition, service rounding, future projections, and detailed tax exemption breakdown.
📅 Updated: 28 Sep 2026•
⚖️ Wage rule: From 21 Nov 2025•
📐 Formula: 15/26•
🔍 Verified: KitnaPaisa Research Team
What Is Gratuity?
Gratuity is a lump-sum employment benefit payable when an employee's employment ends in circumstances covered by the applicable gratuity provisions. The amount is linked to the employee's last drawn statutory wages and eligible service period.
How Is Gratuity Calculated?
For a monthly-rated employee, the standard statutory calculation is based on 15 days' wages for each eligible year of service. The monthly wage is divided by 26 and multiplied by 15.
Gratuity = (Last Drawn Monthly Statutory Wage ÷ 26) × 15 × Eligible Years
What Changed for Gratuity From 21 November 2025?
The Labour Ministry's Additional FAQs state that the revised definition of wages applies to gratuity from 21 November 2025. The definition includes a 50% test: when specified excluded allowances and benefits exceed 50% of remuneration, the excess is added back into wages for statutory calculations.
Gratuity and Tax Exemption
Gratuity's tax treatment depends on the employee's category. For non-government employees, the tax-exempt amount is the least of: (1) Actual gratuity received, (2) ₹20,00,000, or (3) 15 days' salary × completed years of service. The calculator's breakdown section shows exactly how this is derived.
Frequently Asked Questions
What is the 15/26 gratuity formula? ▼
The 15/26 formula means 15 days of wages for every eligible year of service. For a monthly-rated employee, the monthly wage is divided by 26 and multiplied by 15, then multiplied by the eligible years of service.
Does 4 years 7 months count as 5 years for gratuity? ▼
For the standard completed-year calculation, a part of a year in excess of six months is counted as a completed year. Therefore, 4 years and 7 months is normally treated as 5 years for the completed-year calculation, subject to eligibility and the applicable rules.
Is gratuity available after 5 years of service? ▼
The standard gratuity entitlement generally requires five years of continuous service when employment ends by resignation, retirement or superannuation. The five-year condition does not apply in specified cases such as death, disablement and certain fixed-term employment situations.
Does a fixed-term employee get gratuity before five years? ▼
The Labour Ministry's Labour Codes FAQ states that completion of five years is not necessary for expiry of a fixed-term employment contract, and fixed-term employment gratuity is paid on a pro-rata basis subject to the applicable provisions.