Guide
Gratuity formula under the Payment of Gratuity Act
Five years of service, 15 days’ wages for each year, divided by 26, capped at ₹20 lakh.
Open the Gratuity calculatorEligibility and rounding
Covered employees generally need five years of continuous service. A year with 6 months or more is rounded up. Salary for this formula is last drawn basic + DA.
Worked example
Basic + DA of ₹80,000 and 12 completed years: (80,000 × 15 × 12) / 26 ≈ ₹5.54 lakh. The statutory cap is ₹20 lakh; employers may pay more under company policy.