Calculate your gratuity amount as per the Payment of Gratuity Act, India.
Minimum 5 years of service required for gratuity eligibility.
Gratuity is a statutory benefit paid by employers to employees as a token of gratitude for long and dedicated service. In India, it is governed by the Payment of Gratuity Act, 1972. An employee becomes eligible for gratuity after completing a minimum of 5 years of continuous service with the same employer. Our gratuity calculator India helps you quickly estimate your gratuity entitlement.
For employees covered under the Gratuity Act: Gratuity = (Last Drawn Salary × 15 × Years of Service) / 26. Here, salary = Basic + Dearness Allowance. 15 represents 15 days of salary per year of service. 26 represents the number of working days in a month (excluding Sundays). For employees not covered by the Act: Gratuity = (Last Drawn Salary × 15 × Years of Service) / 30.
If your last drawn basic + DA salary is Rs. 50,000 per month and you have completed 10 years of service: Gratuity = (50,000 × 15 × 10) / 26 = Rs. 2,88,462. This amount is paid as a lump sum on retirement, resignation after 5 years, death, or disablement.
Gratuity received is tax-exempt up to specific limits. For government employees: fully exempt. For private sector employees covered under the Gratuity Act: exempt up to Rs. 20 lakh or actual gratuity received or 15 days' salary for each year of service, whichever is least. Amounts above the exemption limit are added to income and taxed at applicable slab rates.
Gratuity becomes payable in these situations: retirement or superannuation, resignation after 5 years of continuous service, death or permanent disablement (no minimum service requirement in these cases), and retrenchment. The employer must pay gratuity within 30 days of it becoming due. Delayed payment attracts interest at the rate specified by the government.
Standard tipping percentages vary significantly by country, service type, and even region within a country — 15-20% is common at US restaurants, while tipping is far less customary or even considered unusual in many other countries, where service charges may already be included in the bill. This variation makes gratuity calculators particularly useful for travelers navigating unfamiliar tipping norms, where guessing wrong in either direction can feel awkward or, in some cultures, mildly offensive.
It's worth distinguishing between tipping and a service charge, which is sometimes automatically added to a bill (particularly for large groups) and may or may not actually go to the serving staff depending on the establishment's policy — checking whether a service charge is already included before adding an additional tip on top avoids accidentally over-tipping or under-tipping.
When splitting a bill among a group, deciding whether to split evenly or calculate each person's share based on what they individually ordered changes how the tip should be calculated — an evenly split bill typically calculates tip on the total before dividing, while individually itemized splits usually calculate each person's tip based on their own portion of the total order.
Tipping expectations vary not just by country but by service type within the same country — sit-down restaurant service, delivery drivers, hairdressers, and hotel staff each have their own customary tipping ranges that don't necessarily match each other. Knowing the general expectation for the specific type of service being tipped, rather than applying one flat percentage universally across every situation, avoids both under-tipping and unnecessary over-tipping.
Gratuity is a payment made by an employer to an employee as a token of appreciation for services rendered over a long period, usually 5+ years.
An employee who has completed at least 5 years of continuous service with an employer is eligible for gratuity in India.
Gratuity = (Last drawn salary × 15 × Years of service) / 26. This formula applies to organizations covered under the Gratuity Act.
Gratuity up to Rs. 20 lakhs is tax-exempt for government employees. For private sector, it depends on whether the employer is covered under the Gratuity Act.
