Gratuity calculator
Two meanings, two calculators: the gratuity on a restaurant or event bill, and the employee gratuity paid in India when you leave a job.
Gratuity
$43.20
What percentage was that gratuity?
Found a gratuity line on a bill and want to know the rate? Enter both numbers.
Enter both amounts.
Gratuity on a bill: what to know
- Large parties: many restaurants add 18–20% automatically for groups of six or more. It must be disclosed, usually on the menu.
- Events and catering: contracts often include a service charge of 18–22%. Ask whether it goes to staff; if not, tip them separately.
- Cruises and resorts: daily gratuities or resort fees may be charged automatically; they can often be adjusted at guest services.
Employee gratuity in India
Gratuity is a thank-you payment for long service under the Payment of Gratuity Act, 1972, now folded into the Code on Social Security, 2020. For covered employers the formula is last drawn wages × 15 × completed years ÷ 26 (15 days' pay per year, on a 26-working-day month). For employers not covered by the Act, a common formula uses 30 days and counts only completed years. The maximum tax-free amount is ₹20 lakh. Check your employer's policy or an adviser before relying on an estimate.
For tips on regular restaurant bills, use the tip calculator.
Questions people ask
What is a gratuity?
In restaurants and hospitality, a gratuity is another word for a tip. An "automatic" or "included" gratuity is a tip added to the bill by the business, typically 18–20% for large parties. In employment (especially in India), gratuity is a lump sum paid by the employer when an employee leaves after long service.
Is gratuity the same as a service charge?
Not always. In the US the IRS treats a mandatory service charge as wages paid by the employer, not a tip, and the business decides how it's distributed. A voluntary gratuity is a tip. The wording on the bill matters, so ask if you're unsure whether it goes to staff.
Do I tip on top of an automatic gratuity?
No, not normally. The gratuity is the tip. Add extra only for truly exceptional service.
How is gratuity calculated in India?
Under the Payment of Gratuity Act, 1972 (now part of the Code on Social Security, 2020): last drawn basic pay + dearness allowance × 15 × years of service ÷ 26. Service of more than six months in the final year counts as a full year. The tax-free limit is ₹20 lakh.
Who is eligible for gratuity in India?
Employees with at least five years of continuous service at an establishment with 10 or more employees. Under the labour codes in force from 21 November 2025, fixed-term employees qualify after one year. The five-year rule does not apply on death or disablement.