Gratuity Formula — Complete Explanation
Formula: Gratuity = (Last Basic + DA) × Years of Service × 15/26
The number 15 represents 15 days of salary for each year. The number 26 represents working days in a month (excluding 4 Sundays). This formula applies to companies covered under the Payment of Gratuity Act, 1972 (10+ employees).
Gratuity for IT Professionals in Delhi, Mumbai, Bangalore
| City | Avg Basic Salary | After 5 Years | After 10 Years | After 15 Years |
|---|---|---|---|---|
| Delhi NCR | ₹60,000/mo | ₹1,73,077 | ₹3,46,154 | ₹5,19,231 |
| Mumbai | ₹75,000/mo | ₹2,16,346 | ₹4,32,692 | ₹6,49,038 |
| Bangalore | ₹80,000/mo | ₹2,30,769 | ₹4,61,538 | ₹6,92,308 |
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Frequently Asked Questions
What if I resign before 5 years? +
No gratuity is payable if you resign before completing 5 years of continuous service. Exception: death or permanent disability — gratuity paid even before 5 years. Some companies have their own gratuity policies that are more generous than the Act.
When must employer pay gratuity? +
Employer must pay gratuity within 30 days of it becoming due. If payment is delayed, employer must pay simple interest at 10% per annum on the gratuity amount for the period of delay. In case of dispute, employee can approach the Controlling Authority under Payment of Gratuity Act.
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📅 Last Updated: June 2026✅ RBI Verified⭐ 4.8/5 · 10,000+ users