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How to use this gratuity calculator
Enter last salary
Use basic salary plus dearness allowance if applicable.
Add service period
Enter completed years and extra months of service.
Check gratuity
View estimated amount and formula breakdown instantly.
Gratuity formula
Gratuity = Last Drawn Salary × 15 × Completed Years of Service ÷ 26. The salary usually means basic salary plus dearness allowance. If service exceeds a full year by 6 months or more, it may be rounded up.
What is gratuity?
Gratuity is a long-service benefit paid by an employer to an employee as a reward for continuous service. It is commonly received during resignation, retirement, superannuation, termination or other eligible separation cases.
For salaried employees, gratuity can become an important part of full and final settlement. Many companies include gratuity in cost-to-company, but the employee usually receives it only after meeting eligibility conditions.
This calculator helps employees, HR teams and payroll teams estimate gratuity quickly. It is useful during salary negotiation, job change planning, retirement planning and final settlement discussions.
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FAQs
What is a gratuity calculator?
A gratuity calculator estimates the amount payable to an employee based on last drawn salary and years of service.
What salary is used for gratuity?
Usually last drawn basic salary plus dearness allowance is used for gratuity calculation.
What is the common gratuity formula?
A common formula is Last Drawn Salary × 15 × Completed Years of Service ÷ 26.
Why is 26 used in gratuity calculation?
26 represents working days in a month in the standard gratuity formula.
Is 5 years service required?
In many cases, gratuity eligibility starts after 5 years of continuous service, subject to local rules.
Are extra months counted?
If service beyond completed years is 6 months or more, it is often rounded to the next year.
Is this calculator country-specific?
It provides a general estimate and uses your selected country currency formatting.
Can HR teams use it?
Yes. HR and payroll teams can use it for quick gratuity estimates.
Is gratuity taxable?
Tax treatment depends on local laws, exemption limits and employee category.
Does bonus count for gratuity?
Usually bonus is not part of the standard gratuity salary base.
Does overtime count for gratuity?
Generally overtime is not included in basic gratuity calculation.
Is gratuity paid on resignation?
Eligible employees may receive gratuity on resignation after meeting service conditions.
Can gratuity be paid before 5 years?
Some special cases may apply depending on law and employment conditions.
Is this calculator free?
Yes. HQCalc gratuity calculator is free.
Does it replace legal advice?
No. It is an estimate. Final amounts should be verified with HR or official rules.
What is completed service?
Completed service means the number of full years worked with the employer.
What if I worked 5 years and 7 months?
Many gratuity calculations round it to 6 years because extra months exceed 6 months.
Can employers pay more gratuity?
Some employers may provide better benefits than statutory minimums.
Is gratuity part of CTC?
Many companies show gratuity as part of CTC, but actual payout depends on eligibility.
Can I use it for final settlement?
Yes, it is useful for estimating gratuity during full and final settlement.