Gratuity Calculator

Gratuity is a lump-sum payment made by an employer to an employee for long-term service, governed by the Payment of Gratuity Act, 1972.

An employee becomes eligible for gratuity after 4 years and 240 days of continuous service, except in case of death or disablement.

Maximum limit of gratuity payment is 20 lakhs through one employer but tax exemption under income tax is lifetime. Employer can deny gratuity above 20 lakhs and if he wants to pay then it will be voluntary not statutory. Under Section 10(10) of the Income Tax Act, the ₹20 lakh tax-free limit applies in aggregate for gratuity received from one or more employers during the employee's lifetime

Meaning:

If you get ₹12 lakh from Employer A (tax-free),
Then later ₹15 lakh from Employer B,

👉Only ₹8 lakh of that second payment will be tax-free (₹20 lakh total lifetime exemption).

Case Type

Normal Case

Standard gratuity calculation

Death / Disablement

Special slab calculation

Basic Details

Last Drawn Salary (Basic + DA)

₹

Enter last drawn Basic + DA amount

Date of Joining

Date of Leaving / Death

Final Gratuity

Calculated Amount

₹2,59,615.38

Payable Amount

₹2,59,615.38

Within Statutory Ceiling

Statutory Cap

₹20,00,000

In case of death — Amount payable (slabs)

Less than 1 year

Amount payable: 2 × basic salary

1 year or more but < 5 years

Amount payable: 6 × basic salary

5 years or more but < 11 years

Amount payable: 12 × basic salary

11 years or more but < 20 years

Amount payable: 20 × basic salary

20 years or more

Amount payable: Half month's salary for every completed 6 months of service (like normal gratuity formula)

Final Rule of Thumb Comparison

When Normal < Death Slab

Pay death gratuity (slab)

When Normal > Death Slab

Pay normal gratuity (formula)

Either Way

Apply ₹20 lakh statutory ceiling

Who Gets the Gratuity

✓If nomination is registered: Gratuity is paid to the nominee.
✓If no nomination: Payment is made to legal heirs (spouse, children, etc.).
✓If minor heirs exist: Amount is deposited in their name in a bank until majority.

Time Limit & Payment Steps

Employer to Determine

Within 30 days of death

Payment to Nominee/Heir

Within 30 days thereafter

⚠️ Delay in Payment

10% simple interest per annum (Section 7(3A))

The Core Principle

When an employee dies while in service, the Payment of Gratuity Act, 1972 applies through Rule 10(1) of the Payment of Gratuity (Central) Rules, 1972, which provides minimum slabs for gratuity based on completed service years.

👉 Those slabs are not maximum limits. They are minimum guaranteed amounts payable if the normal formula gives less.

So, if the normal formula amount is higher than the death slab amount, the higher (normal) amount must be paid — subject to the ₹20 lakh ceiling.

Supporting Logic from the Law

Let's see what Rule 10(1) says: "In the case of death of an employee, gratuity shall be paid to his nominee or heirs at the rates prescribed below"

In the case of death of an employee, gratuity shall be paid to his nominee or heirs at the rates prescribed below — Provided that the amount of gratuity payable shall not exceed the amount which would have been payable had the employee retired on that date.