Formula :
Gratuity Calculation= [ (BasicPay + D.A) x 15 days x No.of years of service ] / 26
Where,
D.A = Dearness Allowance End of Service Benefits

Eligibility :

1. Any person employed on wages/salary.
2. At the time of retirement or resignation or on superannuation, an employee should have rendered
continuous service of not less than five years.
3. Payable without completion of five years only when death and disablement.

Why 26 days?

But what do you think what is the salary of a day. Will it be a monthly salary divided by 31 or a monthly salary divided by 30? 
No. It would be a monthly salary divided by 26. Why? It is because, according to labor law, every
employee is entitled for weekly offs. Therefore, the average working days in a month is not more than 26 days. You get the monthly salary for the work of 26 days. Hence, your one day salary would be a monthly salary divided by 26. 
  • The Period of Service For the Gratuity Payment Your gratuity increases with the increase of the service period. But to get the gratuity you must complete 5 years in the service (more than 4 years 6 months). 
For the gratuity calculation, 
The years of service are rounded off to the nearest integer. It means if you have completed the 7 years 7 months in the service, the length of service for gratuity calculation would be 8 years. 
Similarly, 
  • If you have completed the 9 years and 5 months, the period for gratuity calculation would be 9 years.
The Commission, after  examination of the matter, recommends the following revised rates for payment of death gratuity:  
Thanks to Postman Vijay