How to Calculate Your Gratuity When Leaving a Job in India

Leaving your job and wondering how much gratuity you’ll get? Here’s a simple guide to help you calculate it.

The Formula: How Gratuity Works

Gratuity is a lump sum paid to employees when they leave a job after at least 5 years of service. The formula is:
Gratuity = (Last Drawn Salary × 15 × Number of Years of Service) / 26

👉 Use our free Gratuity Calculator

Example Walkthrough

If your last drawn salary is ₹50,000 and you worked for 10 years:
Gratuity = (50,000 × 15 × 10) / 26 = ₹2,88,462

Tips & Common Mistakes

Only applicable if you’ve completed 5+ years in the same company.
Some employers offer more than the minimum required.
Gratuity is tax-free up to a limit (currently ₹20 lakh).

FAQ

Q1: Is gratuity taxable?
Up to ₹20 lakh is tax-free for private sector employees.

Q2: Can I get gratuity before 5 years?
Usually no, except in case of death/disability.

Q3: Is basic salary or gross salary used?
Usually basic + dearness allowance.