Gratuity Calculation: What will be your gratuity for Rs 50,000, Rs 70,000 and Rs 90,000 last-drawn salary after 10 years & 7 months of service?

What exactly is gratuity and why is it paid?

Gratuity is a thank-you from your employer—literally a financial way to say, “Thanks for sticking with us!” If you’ve worked with a company for five years or more, you’re entitled to this one-time payout when you leave, retire, or even in case of disability. It’s a reward for your loyalty and long-term service.

Who gets gratuity—and when?

You become eligible for gratuity after completing five years of continuous service with the same employer. The law that ensures this benefit is called the Payment of Gratuity Act, 1972. But here’s the interesting bit: even if you haven’t completed five years, gratuity is still paid if you retire early due to disability or pass away (in which case, it goes to your nominee).

Situations when gratuity comes into play

Wondering when you’ll actually get the money? Here are the four key occasions:

• When you retire
• If you resign after 5 years
• In case of death or permanent disability
• Or on superannuation (when you reach your official retirement age)

How do companies count your service for gratuity?

This part is important—if you’ve completed 10 years and 7 months, it will be rounded off to 11 years while calculating your gratuity. That’s because anything more than 6 months is considered a full year. So yes, those extra months count!

What actually decides your gratuity amount?

Two things matter most:

• Your last drawn basic salary (plus dearness allowance, if any)
• The number of years you’ve worked in the company
• So the higher your salary and the longer your service, the bigger the payout.

Can a company refuse to pay gratuity?

If the company comes under the Gratuity Act, it legally cannot opt out. So no, they can’t just skip it. As long as you meet the basic eligibility, you’re entitled to your gratuity—no ifs or buts.

The simple formula to calculate your gratuity

Here’s the math (don’t worry, it’s easy):

• (Last Drawn Salary × Number of Years × 15) ÷ 26
• This means you get 15 days' salary for each year you’ve worked, based on a 26-working-day month.

How much gratuity on a Rs 50,000 salary after 10.7 years?

Let’s break it down:

• Years rounded to: 11
• Calculation: (50,000 × 11 × 15) ÷ 26
• Gratuity = Rs 3,17,307

How much if you earned Rs 70,000?

Same process:

• Years rounded to: 11
• Calculation: (70,000 × 11 × 15) ÷ 26
• Gratuity = Rs 4,44,230

And for a Rs 90,000 monthly salary?

You guessed it:

• Years rounded to: 11
• Calculation: (90,000 × 11 × 15) ÷ 26
• Gratuity = Rs 5,71,153

So the longer you stay and the more you grow, the bigger your gratuity cheque gets.