Gratuity eligibility and a rough estimate for salaried staff

Five years is the usual gate

For employees covered by the Payment of Gratuity Act, gratuity generally becomes payable after five years of continuous service (with limited exceptions such as death or disablement, where the five-year condition is relaxed). Coverage depends on the establishment and headcount rules in the Act—not every workplace label of "gratuity" follows the same statute. Confirm with HR whether your employer is covered and what wage definition they use.

Service is typically counted in completed years; partial years may be rounded under the Act's rules. The calculator on this site is an estimate aid, not a legal determination.

The rough formula most private staff see

A common estimate is (15/26) × last drawn wages × completed years of service, using basic plus dearness allowance as wages where that is the employer's practice. Caps and employer policies can change the payable amount. Government and some public-sector patterns differ. Run your last drawn wages and years through the gratuity calculator for a planning figure, then read the appointment letter and HR policy for the real one.

Do not confuse eligibility with take-home tax

Exemption limits and taxability of gratuity depend on whether your employer is covered, your status, and the Income-tax Act provisions in force for the year of receipt. The estimate page is for sizing the employer payout, not for filing. Keep Form 16 / employer workings when you leave, and use a tax professional if the amount is large.