GratuityCalc

India Gratuity Calculator

Enter your basic + DA, total pay and service to see your gratuity under the labour codes, next to the old basic + DA figure.

Last drawn monthly salary (basic + DA)

Rs.

Total monthly pay (fixed pay + employer PF)

Rs.

Your CTC ÷ 12, leaving out gratuity and performance pay.

Employment

Years of service

Extra months of service

The labour codes raise your gratuity by Rs. 57,692, because your allowances are more than half your pay and Rs. 10,000 a month is added back to wages.

Gratuity under the labour codes

Rs. 2,88,462

10 years at Rs. 50,000 a month

Wages for gratuity: Rs. 50,000 a month
Years counted: 10
Before the codes: Rs. 2,30,769
Change: Rs. 57,692

What you entered

Basic + DA: Rs. 40,000Total pay: Rs. 1,00,000Service: 10 years 0 months

1
Years that count: completed years, plus one more if the last part is over six months
10 years 0 months= 10 years
2
Wages for gratuity: basic + DA, or half your monthly pay if that is more (the 50% rule)
larger of Rs. 40,000 and Rs. 1,00,000 ÷ 2= Rs. 50,000 (Rs. 10,000 added back)
3
Gratuity: 15 days' wages for each year, a day being a month's wages ÷ 26
15 × Rs. 50,000 × 10 ÷ 26= Rs. 2,88,462
4
Before the codes, gratuity used basic + DA only
15 × Rs. 40,000 × 10 ÷ 26= Rs. 2,30,769

Result

Gratuity: Rs. 2,88,462

Under the Code on Social Security, in force since 21 November 2025, gratuity is 15 days' wages for each year at the wages last drawn, up to Rs. 20 lakh. Wages are basic + DA plus any allowances above half your pay. Up to Rs. 20 lakh of gratuity in a career is tax-free for private-sector employees; government employees pay no tax on it.

Gratuity payable by salary and years of service

Gratuity under the Code on Social Security (which replaced the Payment of Gratuity Act on 21 November 2025) is 15 x last drawn monthly wages x years of service, divided by 26. Wages are basic plus dearness allowance, plus any allowances above half your pay.

Monthly wages	5 years	10 years	15 years	20 years	25 years
Rs. 20,000	Rs. 57,692	Rs. 1,15,385	Rs. 1,73,077	Rs. 2,30,769	Rs. 2,88,462
Rs. 30,000	Rs. 86,538	Rs. 1,73,077	Rs. 2,59,615	Rs. 3,46,154	Rs. 4,32,692
Rs. 50,000	Rs. 1,44,231	Rs. 2,88,462	Rs. 4,32,692	Rs. 5,76,923	Rs. 7,21,154
Rs. 75,000	Rs. 2,16,346	Rs. 4,32,692	Rs. 6,49,038	Rs. 8,65,385	Rs. 10,81,731
Rs. 1,00,000	Rs. 2,88,462	Rs. 5,76,923	Rs. 8,65,385	Rs. 11,53,846	Rs. 14,42,308

The 26 in the formula is the assumed number of working days in a month, so each completed year earns roughly 15 days of pay. Permanent employees need five years of continuous service, which is why the table starts there; fixed-term employees qualify after one year, and the condition is waived on death or disablement. Service of more than six months in the final year counts as a full year. Gratuity is capped at Rs. 20 lakh, which is also the career limit for tax exemption in the private sector.

What changed on 21 November 2025

The Code on Social Security replaced the Payment of Gratuity Act. The formula is the same, 15 days' wages for every year of service, or part of a year over six months, at the wages last drawn, with a day's wage taken as a month's wages divided by 26. What changed is the wage it uses: wages are basic + DA plus any allowances above half your pay, the 50% rule of the Code on Wages. The Labour Ministry's FAQs say the new wages apply to gratuity from 21 November 2025, on the wages last drawn when you leave.

Who qualifies, and how much

Permanent employees qualify after five years of continuous service; on death or disablement the five years are not needed. Fixed-term employees now qualify after one year of their contract. The maximum is Rs. 20 lakh, and up to Rs. 20 lakh over a career is tax-free for private-sector employees. With Rs. 40,000 of basic + DA, Rs. 1 lakh of total pay and 10 years 7 months of service, 11 years count, wages are Rs. 50,000 and gratuity is Rs. 3,17,308, against Rs. 2,53,846 on basic + DA alone.

Frequently asked questions

How is gratuity calculated under the new labour codes?

Gratuity = 15 x last drawn monthly wages x years counted / 26. Wages are basic + DA, plus any amount by which your allowances exceed half your pay. Years counted are your completed years, plus one if the last part is more than six months. For example, Rs. 50,000 of wages over 10 years gives 15 x 50,000 x 10 / 26 = Rs. 2,88,462.

Do fixed-term employees get gratuity after one year?

Yes. Under the Code on Social Security a fixed-term employee is eligible after completing one year under the contract, counted from its start, and is paid on the same 15 days a year basis. The Labour Ministry's FAQs of March 2026 confirm the one-year rule.

Is gratuity taxable?

For government employees it is fully exempt. For other employees, up to Rs. 20 lakh received over a career is exempt, which matches the Rs. 20 lakh maximum gratuity. Anything paid above that, for example under a better company scheme, is taxable as salary.

Do I get gratuity if I resign?

Yes, after five years of continuous service for a permanent employee, or one year for a fixed-term employee. Gratuity is payable on resignation, retirement, superannuation, termination, death or disablement, and at the end of a fixed-term contract. The service condition does not apply on death or disablement.