After 12 completed years, gratuity equals your last-drawn basic plus dearness allowance multiplied by 15/26 for each year. The table below works it out for a range of salaries so you can read off the figure closest to yours.
| Last-drawn basic + DA (monthly) | Gratuity for 12 years |
|---|---|
| ₹15,000 | ₹1,03,846 |
| ₹20,000 | ₹1,38,462 |
| ₹25,000 | ₹1,73,077 |
| ₹30,000 | ₹2,07,692 |
| ₹40,000 | ₹2,76,923 |
| ₹50,000 | ₹3,46,154 |
| ₹75,000 | ₹5,19,231 |
| ₹1,00,000 | ₹6,92,308 |
The Payment of Gratuity Act formula is (last basic + DA) × 15/26 × completed years. The 15/26 means 15 days of wages for every completed year, counted on a 26-day working month. For 12 years, the multiplier is 15/26 × 12, which is about 6.92 months of basic+DA. So an employee finishing 12 years on a basic+DA of ₹40,000 receives ₹2,76,923.
Only completed years count; a part-year over six months rounds up, under six months is dropped. Gratuity is payable on resignation, retirement, death or disablement once you cross five years of continuous service, and it is tax-free up to a lifetime limit of ₹20,00,000. Anything above that is added to taxable income.
The table uses common salary points. For your precise basic and DA, and to see the tax-free portion, use the gratuity calculator. Employers that run gratuity for a large workforce provision for it every month; ZeniaHR does this automatically for manpower and staffing firms.