Question 1

How is gratuity calculated for a covered establishment?

Accepted Answer

Under the Payment of Gratuity Act, 1972, gratuity is last drawn salary (basic + DA) times 15/26 times completed years of service. A year with six months or more is rounded up. This gratuity calculator uses that 15/26 formula when Covered is selected.

Question 2

What if my employer is not covered by the Gratuity Act?

Accepted Answer

Non-covered establishments commonly use last drawn salary times 15/30 times completed years (half a month per year, 30-day month). Only whole completed years are counted. Switch the toggle to compare.

Question 3

What is the tax exemption cap on gratuity?

Accepted Answer

For most non-government employees, exemption under section 10(10) is the least of actual gratuity, the statutory formula, and a lifetime ceiling. That ceiling has long been 20 lakh rupees; it is an editable default here because notifications can change. Government employees are typically fully exempt. This is not tax advice.

Question 4

Are my salary details uploaded?

Accepted Answer

No. Last drawn pay, years of service, and the formula run in your browser. Nothing is sent to ToolPetal.

Gratuity Calculator FY 2026-27