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Gratuity Calculator

Estimate the gratuity you'll receive when you leave or retire. Enter your last drawn basic + DA and length of service; the calculator applies the 15/26 formula, the rule that more than six months counts as a full year, and the statutory ceiling.

Rates and rules last reviewed:

Basic salary plus dearness allowance only — not HRA or other allowances.

Gross monthly remuneration. Under the labour codes, if allowances exceed half of pay, wages are raised to 50% of this amount.

Type of employment

Fixed-term employees qualify after one year under the Code on Social Security, in force from 21 November 2025.

Is your employer covered by gratuity law?

Most organisations with 10+ employees are covered.

Gratuity payable

₹3,17,308

Wages usedBasic + DA
₹50,000
Years counted
11
Formula
15 × ₹50,000 × 11 ÷ 26
  • Service of more than 6 months in the final year counts as a full year, so 10 years 7 months is counted as 11 years.

For guidance only

This calculator gives an estimate for general information. It is not tax or legal advice. Check the applicable rate and rules for your case on the official sources below or with a qualified professional.

How to use the Gratuity Calculator

  1. Enter your last monthly basic salary plus dearness allowance.
  2. Optionally enter your total monthly pay, so the 50% wage rule under the labour codes can be applied.
  3. Enter completed years and extra months of service.
  4. Choose permanent or fixed-term employment and whether your employer is covered.

Formula

Formula

Covered by the Act: Gratuity = 15 × Last basic + DA × Years ÷ 26

Not covered: Gratuity = 15 × Last basic + DA × Completed years ÷ 30

Why 15/26?

Gratuity is 15 days' wages for each year of service. A month is taken as 26 working days, so 15 days' wages = monthly wages × 15 ÷ 26. For employers not covered by the Act, the customary formula uses 30 days and counts only completed years.

Eligibility and limits

  • Usually payable after 5 years of continuous service; the condition doesn't apply on death or disablement.
  • Fixed-term employees qualify after 1 year of service under the Code on Social Security, in force from 21 November 2025.
  • Under the labour codes, if allowances make up more than half of total pay, wages for gratuity are raised to 50% of total pay.
  • Gratuity under the Act is capped at ₹20,00,000.
  • Income-tax exemption on gratuity has its own limits and rules; check before planning around it.

Note

India's Labour Codes (the Code on Wages, 2019 and the Code on Social Security, 2020) replace older Acts including the Payment of Gratuity Act and the Payment of Bonus Act, and change some definitions such as “wages”. Check which rules apply to your employer.

Worked example

Basic + DA ₹50,000, 10 years 7 months, covered by the Act

  1. 7 months > 6, so 11 years are counted
  2. 15 × 50,000 × 11 ÷ 26

Gratuity ₹3,17,308

Important notes

  • Only basic salary and dearness allowance count — not HRA, special allowance or bonus — unless the 50% wage rule raises the wage base.

Frequently asked questions

Do I get gratuity if I resign after 4 years 8 months?

For permanent employees the condition is 5 years of continuous service. Some court rulings have treated 4 years and 240 working days in the fifth year as sufficient; check your case with HR or a labour lawyer.

Do fixed-term employees get gratuity after one year?

Yes. Under the Code on Social Security, in force from 21 November 2025, fixed-term employees are eligible after one year of continuous service. The formula is the same: 15 × wages × years ÷ 26.

Is gratuity part of my CTC?

Many employers include a gratuity provision (about 4.81% of basic) in CTC. It is paid only when you become eligible and leave.

Sources and review

Last reviewed on by the BizToolsIndia editorial team. Official references:

Spotted an error or a rate change? Tell us.

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