Gratuity Formula
As per the Payment of Gratuity Act, 1972:
Gratuity = (Last Basic + DA) × 15 × Years of Service ÷ 26
Key Points
| Factor | Value |
|---|---|
| Minimum Service | 5 years |
| Maximum Gratuity | ₹25,00,000 (2024) |
| Calculation Base | Last drawn Basic + DA |
| Working Days | 26 days per month |
Rounding Rule
- If additional months of service ≥ 6, it rounds up to the next full year
- Example: 25 years 7 months = 26 years for calculation
Related
Use this alongside the Pension Calculator for complete retirement planning.