Gratuity Eligibility Checker
Check if you qualify for gratuity — the 5-year continuous-service rule and the death/disablement waiver — and estimate your amount live, on one screen.
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- Instant, on-screen results
- Built by our CA · CS team
- Rules cited on the page
Fill in the details — the answer on the right updates as you go.
Gratuity calculation breakdown
Not getting the gratuity you're owed?
Our experts help you claim gratuity, draft Form I, and handle disputes with your employer.
Disclaimer: Indicative estimate under the Payment of Gratuity Act, 1972. Actual eligibility and amount depend on your appointment terms, "continuous service" record and employer policy. The ₹20,00,000 statutory cap applies to covered employees.
Who is eligible for gratuity
Gratuity is a lump-sum reward for long service, paid under the Payment of Gratuity Act, 1972. The core rule: you must complete at least 5 years of continuous service with the same employer. The big exception — the 5-year condition is waived on death or permanent disablement, so the nominee/employee is eligible even after a shorter stint.
Gratuity formula — covered vs non-covered
The formula depends on whether your employer is covered under the Act. Covered employers use a month of 26 working days; non-covered employers use 30 days. In both, one completed year counts as a year, and a part-year over 6 months rounds up to a full year (for covered employers).
| Formula | (15 / 26) × Basic+DA × Years |
| Year rounding | > 6 months → +1 yr |
| Maximum | ₹20,00,000 |
| Days per month | 26 |
| Formula | (15 / 30) × Basic+DA × Years |
| Year rounding | Completed years only |
| Maximum | No statutory cap* |
| Days per month | 30 |
Worked example
An employee with a last-drawn Basic + DA of ₹50,000 completes 6 years of continuous service and resigns from a covered establishment:
Key terms explained
The 5-year rule
You must complete 5 years of continuous service with one employer to earn gratuity on resignation or retirement. Continuous service includes leave, notice period and lay-off — but not a genuine break in employment.
Payment of Gratuity Act, 1972
The central law governing gratuity. It applies to establishments with 10 or more employees and makes gratuity a statutory right, payable within 30 days of it becoming due.
₹20 lakh cap
For covered employees the maximum statutory gratuity is ₹20,00,000. Anything above this is at the employer's discretion and is taxable in the employee's hands.
Tax exemption — Sec 10(10)
Gratuity is tax-exempt up to ₹20 lakh under Section 10(10) of the Income-tax Act (least of actual gratuity, the 15/26 formula amount, or ₹20 lakh). Government employees' gratuity is fully exempt.
Death / disablement waiver
On an employee's death or permanent disablement, the 5-year minimum is waived. Gratuity is paid for the actual years served to the employee or their nominee/legal heir.
Basic + DA only
Gratuity is calculated on last-drawn Basic salary + Dearness Allowance only. HRA, bonuses, overtime and other allowances are excluded from the wage used in the formula.
Questions people ask
Short answers on Gratuity Eligibility Checker. Tap a question to open it.
01Who is eligible for gratuity?
An employee who has completed five years of continuous service with an establishment covered by the Payment of Gratuity Act — one with 10 or more employees. The five-year condition does not apply where service ends due to death or disablement.
02How is gratuity calculated?
For covered employees: last drawn basic plus DA × 15 ÷ 26 × completed years of service, counting any year with more than six months as a full year. For employees not covered by the Act, the formula uses 15 ÷ 30 and only fully completed years.
03Does 4 years and 240 days count as five years?
Several High Courts have held that 4 years and 240 days in the fifth year amounts to continuous service for gratuity, and many employers follow this. It is not universally settled, so the position depends on the employer and the jurisdiction.
04How much gratuity is tax free?
For a non-government employee covered by the Act, exemption under section 10(10) is the least of the actual gratuity, the formula amount, or ₹20 lakh over the person's lifetime. Anything above that is taxable as salary.
05When must gratuity be paid?
Within 30 days of it becoming payable. Delay beyond that attracts simple interest at the notified rate from the due date to the date of payment.
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Disclaimer: This tool gives indicative results for general guidance only and is not professional advice. Please verify with a qualified CA before acting on the numbers.