Introduction
Gratuity is money you earn or give as a thank-you. It can be a lump sum from your employer when you leave a job, or a tip you leave at a restaurant. Our Gratuity Calculator handles both. Use the Employee Gratuity tab to find out how much statutory gratuity you can expect under Indian labor law. It covers government employees, private workers covered by the Code on Social Security, 2020, and those not covered, each using its own formula. Simply enter your last drawn salary (Basic Pay + Dearness Allowance), your years of service, and your employee type to get an instant result. You can type in your service years or pick your joining and last working dates, and the calculator will round your tenure as the law requires.
Switch to the Tip Calculator tab when you need to figure out how much to leave at a restaurant, café, or for any service. Enter your bill amount, choose a tip percentage, and select how many people are splitting the check. The tool shows the tip amount, total bill, and each person's share right away. A built-in comparison table lets you see how different tip percentages (from 10% to 30%) change what you owe, so you can pick the amount that fits your budget. Both calculators include clear charts and step-by-step formulas, making it easy to understand exactly how your numbers are calculated.
How to Use Our Gratuity Calculator
This calculator has two tools: an Employee Gratuity Calculator for Indian statutory gratuity and a Tip Calculator for restaurant bills. Enter your details below, and the calculator will show you the exact gratuity or tip amount you can expect.
Employee Gratuity Calculator
Employee Type: Pick the type that matches your job. Choose "Government Employee" if you work for the government, "Private (Covered by the Code)" if your employer is covered by the gratuity rules of the Code on Social Security, 2020, or "Private (Not Covered)" if it is not. Each type uses a different formula to figure out your gratuity.
Monthly Salary (Basic Pay + DA): Enter the sum of your last drawn basic pay and dearness allowance. You can type a number between ₹10,000 and ₹10 crore, or drag the slider to set the amount. Wages for gratuity are basic pay, dearness allowance and any retaining allowance.1 If pay such as bonus, house rent allowance, overtime allowance and commission adds up to more than one-half of your total pay, the amount above one-half is added to wages.1 Include that amount in the salary you enter.
Service Period: Choose how you want to enter your time at the company. Select "Enter Years" to type in your total years of service (between 1 and 50), or select "Date Picker" to enter your date of joining and last working day. If you use dates, the calculator will figure out the total tenure and round it as per the Gratuity Act rules. Note that covered employees generally need at least 5 years of continuous service to qualify.1
Tip Calculator
Bill Amount: Enter the total amount of your restaurant bill or service bill in dollars. This is the pre-tip amount shown on your check before any gratuity is added.
Tip Percentage: Set how much you want to tip as a percentage of the bill. You can type a number, use the slider, or click one of the preset buttons (10%, 15%, 18%, 20%, or 25%) for quick selection. A comparison table will also show you what different tip percentages would cost.
Split Between (People): Enter the number of people sharing the bill. If you are paying alone, keep this at 1. If you are splitting with others, set it to the total number of people. The calculator will break down each person's share of both the bill and the tip so everyone knows exactly what they owe.
What Is Gratuity?
Gratuity is a sum of money paid by an employer to an employee as a reward for long service. In India, this benefit is governed by the Code on Social Security, 2020, which replaced the Payment of Gratuity Act, 1972.1 Its rules apply to gratuity paid on or after 21 November 2025.2 Employees generally qualify after at least five years of continuous service with the same employer.1 It is a form of retirement benefit, similar to a thank-you payment for your years of hard work and loyalty to a company.
The word "gratuity" also has a second, everyday meaning: a tip you leave at a restaurant, hotel, or for any service. Both meanings share the same idea: giving money to show thanks. This calculator handles both types, so you can figure out your employee gratuity or calculate a fair tip for your next meal.
How Is Employee Gratuity Calculated in India?
The formula for calculating gratuity depends on the type of employee you are:
- Government employees: Gratuity = Last Drawn Salary × Years of Service × 0.5.
- Private employees covered by the Code: Gratuity = (Last Drawn Salary × 15 × Years of Service) ÷ 26.1
- Private employees not covered under the Act: Gratuity = (Last Drawn Salary × 15 × Years of Service) ÷ 30
In these formulas, "Last Drawn Salary" means your most recent Basic Pay plus Dearness Allowance (DA). The number 26 represents the working days in a month, while 15 represents half a month's wages for each year of service. For employees not covered by the Code, 30 calendar days are used instead of 26 working days, which results in a slightly lower amount.
Who Is Eligible for Gratuity?
Under the Code on Social Security, 2020, you must complete at least 5 years of continuous service with the same employer to be eligible.1 This rule does not apply when employment ends through death, disablement or the end of a fixed-term contract.1 A fixed-term employee becomes eligible after one year of service under the contract.2 The gratuity rules apply to every factory, mine, oilfield, plantation, port and railway company, and to every shop or establishment with 10 or more employees.1
Rounding of Service Years
When calculating gratuity, if the remaining months of service beyond full years exceed 6 months, the service period is rounded up to the next full year.1 For example, 14 years and 7 months would count as 15 years for gratuity purposes.
Gratuity Tax Rules
Gratuity received by government employees is fully exempt from income tax. For private sector employees covered under the Act, the tax-exempt amount is the least of the following three: the actual gratuity received, ₹20 lakh (the current maximum limit), or the amount calculated using the formula. Any gratuity above the exempt limit is added to your taxable income, where it is taxed at the rate set by your tax bracket.
How Does the Tip Calculator Work?
The tip calculator helps you figure out how much to leave as a gratuity at restaurants or for services. You enter your bill amount, choose a tip percentage, and select how many people are splitting the bill. The calculator then shows the total tip, the full amount including tip, and each person's share. Common tip percentages in the United States range from 15% to 20% for standard service, with 18% being a widely used default.
Why Gratuity Matters for Your Financial Planning
Employee gratuity can be a significant lump sum when you retire or leave a job. For someone earning ₹60,000 per month with 20 years of service, the gratuity amount under the Act works out to nearly ₹7 lakh. Over a longer career, this number grows substantially. Including your expected gratuity in your retirement planning gives you a clearer picture of the total funds you will have when you stop working. It is one of several benefits, along with the Employees' Provident Fund (EPF) and pension, that form the foundation of financial security for salaried workers in India.