Gratuity Calculator
Work out your end-of-service gratuity under the scheme that applies to you: the Indian 15/26 rule or the day-based Gulf formulas for the UAE, Saudi Arabia and Kuwait. Enter your basic salary and either your service dates or years, and the calculator shows the daily wage, the day-band split, any statutory cap, and the resignation factor where it matters.
Formula
Worked example
India, salary 60,000 and 10 years: 60,000 × 15 ÷ 26 = 34,615 per year, so 346,154 in total. UAE, basic 10,000 and 8 years: daily wage 333, first 5 years 333 × 21 × 5 = 35,000, next 3 years 333 × 30 × 3 = 30,000, total about 65,000, well under the 2-year cap of 240,000.
How gratuity is calculated, scheme by scheme
End-of-service gratuity is a lump sum your employer pays when you leave, and the formula depends on where you work. India uses the 15/26 rule: 15 days of wages for each completed year of service, treating a month as 26 working days, so the amount is last drawn basic salary multiplied by 15 and by the years, divided by 26. The Gulf states instead base the benefit on a daily wage equal to basic salary divided by 30, then award a set number of days for each year. The UAE pays 21 days per year for the first five years and 30 days per year after that, Saudi Arabia pays half a month (15 days) for the first five years and a full month (30 days) beyond, and Kuwait pays 10 days for the first five years and 15 days after that. Pick your scheme and the calculator applies the right day count automatically.
Which salary counts, and entering your service
Every scheme calculates on basic salary only, the figure before housing, transport, utilities, bonuses and overtime. In India you also include dearness allowance. Entering the full gross package is the most common mistake and inflates the result. For service you can type the total number of years, or switch to date mode and enter your joining and last working dates so the calculator counts the exact period and pro-rates partial years, which is how the Gulf formulas work. Date mode also lets you deduct unpaid leave that does not count toward continuous service. India rounds to completed years, where a final part-year of six months or more rounds up to a full year.
Caps, resignation and tax
Several schemes limit how much gratuity can be paid. The UAE caps the total at two years of basic salary, and Kuwait caps it at 18 months of basic salary, so a very long career can earn less than the raw formula suggests. Saudi Arabia has no cap but reduces the award when you resign rather than being terminated: under one-third for two to five years of service, two-thirds for five to ten years, and the full amount only beyond ten years, while termination, contract completion and retirement always pay in full. Since the UAE 2022 labour law there is no resignation penalty, resignation and termination are treated the same. In India the gratuity received is tax-free up to a lifetime ceiling of twenty lakh rupees, and the calculator shows that tax-free portion. Treat these figures as estimates and confirm the precise method and any caps against your contract and current labour law.
Gratuity day counts by scheme
| Scheme | First 5 years | After 5 years | Cap | Resignation |
|---|---|---|---|---|
| India | 15 days /26-day month | 15 days /26-day month | ₹20 lakh tax-free | No reduction |
| UAE | 21 days | 30 days | 2 years basic | No reduction (since 2022) |
| Saudi Arabia | 15 days | 30 days | None | 1/3, 2/3 then full by tenure |
| Kuwait | 10 days | 15 days | 18 months basic | No reduction |
Day counts apply per year of service. Gulf schemes use a daily wage of basic salary divided by 30.
Frequently asked questions
How is gratuity calculated in India?
India uses the 15/26 rule: 15 days of wages for each completed year of service, treating a month as 26 working days. The calculation is last drawn basic salary (plus dearness allowance) × 15 × completed years ÷ 26. A final part-year of six months or more rounds up to a full year.
How is UAE end-of-service gratuity calculated?
The UAE bases gratuity on a daily wage of basic salary divided by 30. You earn 21 days of pay for each of the first five years and 30 days for each year after that. The total is capped at two years of basic salary. Since the 2022 labour law, resigning no longer reduces the amount.
Does resigning reduce my gratuity in Saudi Arabia?
Yes. In Saudi Arabia, resigning before two years pays nothing, between two and five years pays one-third of the award, between five and ten years pays two-thirds, and beyond ten years pays the full amount. Termination, contract completion and retirement always pay in full.
Which salary should I enter?
Enter your last drawn monthly basic salary only (plus dearness allowance in India). Exclude housing, transport and other allowances, bonuses and overtime. Including them is the most common mistake and overstates your gratuity.
How many years of service do I need to qualify?
In India you generally need five continuous years with the same employer, with exceptions for death or disablement. The UAE, Saudi Arabia and Kuwait require at least one year of continuous service before any gratuity is payable.