Gratuity Calculator

Understanding the result

Gratuity is a single lump sum paid when the job ends. Your last drawn wages apply to every year you served, so a raise late in your career lifts the amount for all of them.

• Gratuity payable — the amount under the Code, with the formula filled in beneath it. It is never more than ₹ 20,00,000.
• Not payable — your service is below the minimum for the case you chose: 5 years, 3 for a working journalist, or 1 under a fixed-term contract.
• If your final year counts — shown when you are within a year of the minimum and your final year holds at least 190 days of service. Some High Courts treat such a year as complete, which makes gratuity payable on the minimum's years; one does not. See the rules below before relying on it.
• By exact service — shown for death. The Code pays a deceased employee's gratuity "pro rata" without defining it; this figure uses whole months of service ÷ 12 instead of counted years.
• Service counted — shown when your service has a part-year: the whole years the formula uses, after the six-month rule.
• Wages used — shown when part of your other pay is added to basic pay.
• Formula amount above the ceiling — what the formula gives beyond ₹ 20,00,000. It is due only if your contract, an agreement or an award gives better terms than the Code.
• Tax — the Income-tax Act, 2025 exempts gratuity paid under the gratuity statute in full. That entry still names the repealed Payment of Gratuity Act, 1972. If it is read as not reaching the Code, the entry for other gratuity applies, with a lower limit; where that limit is below your gratuity, Exempt if taxed as other gratuity shows the exempt and taxable parts on that reading.

What to enter

• Monthly basic pay + DA — basic pay and dearness allowance for your last month, plus retaining allowance if you get one. It cannot be zero.
• Other monthly pay and allowances — house rent allowance, conveyance, special allowance, overtime, commission and the employer's provident fund contribution. Leave out performance incentives and reimbursements. Zero by default, which leaves wages at basic pay + DA.
• Service — as Years and months (whole numbers, up to 60 years and 11 months), or as Dates: your joining date and last working day. Service runs through the last working day, so 1 January 2020 to 31 December 2024 is five years.
• How the job ended — resigned, retired or terminated; the end of a fixed-term contract; disablement; or death. It sets the minimum service.
• Working journalist — offered under the first case only; it lowers the minimum from 5 years to 3.

Under the result, If you stay longer lists gratuity at 5 to 30 years of service on the wages you entered, with your own service marked and, where the wages reach it, the years of service at which the ceiling applies. It is shown for the first two cases.

How gratuity is calculated

Gratuity is 15 days' wages for each counted year of service. A month is taken as 26 days, so a day's wages are monthly wages ÷ 26. Each year of service therefore adds 4.81% of a year's wages.

Wages are basic pay and dearness allowance. Where your other pay is more than half of all your pay, the part above half is added to wages.

Counted years are your completed years, plus one when the final part-year is longer than six months. Six months exactly does not count; six months and a day does. The minimum service is tested on your actual service, never on the counted years: 4 years 8 months is below five years although it counts as five.

Tax. On the reading that the entry for other gratuity applies, the exempt amount is the least of the gratuity, ₹ 20,00,000, and half a month's salary for each completed year of service. The Act averages salary over the ten months before you leave; the calculator uses the basic pay + DA you enter, without the add-back, and completed years without the six-month rule.

Each figure is rounded once, at the end, to the nearest rupee.

Wages = Basic + DA + max(0, Other pay − (Basic + DA + Other pay) ÷ 2)

Gratuity = Wages × 15 ÷ 26 × Counted years, up to ₹ 20,00,000

Examples

Gratuity at a glance

Rules and sources

Chapter V (sections 53 to 58) of the Code on Social Security, 2020 governs gratuity from 21 November 2025, when it replaced the Payment of Gratuity Act, 1972. Where the last drawn wages fall on or after that date, the Code applies to the whole service, including the years before it.

• Who is covered — factories, mines, oilfields, plantations, ports and railway companies, and shops and establishments with ten or more employees on any day of the preceding twelve months. No law sets gratuity for an employer outside these; the contract does.
• Rate — 15 days' wages for every completed year of service or part of a year in excess of six months; for a monthly-rated employee, monthly wages ÷ 26 × 15.
• Minimum service — five years of continuous service; three for working journalists. No minimum applies on death or disablement, or when fixed-term employment expires.
• Fixed-term employees — under the Social Security (Central) Rules, 2026, gratuity is payable after at least one year of service under the contract, and a later part-year over six months counts as a year. State rules were not reviewed.
• Death — the Code pays fixed-term and deceased employees "on pro rata basis" and does not define it. For fixed-term staff the Central Rules settle how a part-year rounds; for death nothing does, so the calculator shows both readings.
• The final year — a year counts as continuous service when the employee worked 240 days in the preceding twelve months, or 190 below ground in a mine or where the week is shorter than six days. Whether that completes the fifth year is unsettled. The Madras High Court (Mettur Beardsell), the Kerala High Court (Sreeja B., 2015) and the Delhi High Court (TV Today Network v. Ankita Sodhi, 2024, at 4 years 11 months 20 days) held that it does. The Karnataka High Court (BEML and Alvas Institute of Engineering, both June 2022) held that it does not when the employee resigns. Those judgments read the 1972 Act, whose wording the Code repeats; the Supreme Court has not ruled.
• Ceiling — the amount the Central Government notifies, currently ₹ 20,00,000. Better terms under an award, agreement or contract are unaffected.
• Wages — basic pay, dearness allowance and retaining allowance. House rent allowance, conveyance, overtime, commission, the employer's provident fund contribution, statutory bonus and similar payments are excluded, but where they exceed half of all remuneration the excess is added to wages. Performance incentives, ESOPs and reimbursements are not wages.
• Tax — under section 19 of the Income-tax Act, 2025, gratuity under the Payment of Gratuity Act, 1972 is exempt up to the amount that Act computes. Other gratuity is exempt up to the least of the amount received, ₹ 20,00,000, and half a month's salary (basic pay and dearness allowance, averaged over the ten months before leaving) for each completed year. That limit is for life, less gratuity exempted in earlier years. The first entry still names the repealed Act, and the tax department has not said which entry covers gratuity under the Code.
• Payment — due within 30 days, with interest after that. It can be forfeited, wholly or in part, for damage to the employer's property, violence, or an offence involving moral turpitude.

The calculator leaves out: Central and State Government employees under their own gratuity rules; seasonal employees (seven days' wages a season) and piece-rated employees (an average of three months' wages); forfeiture; and gratuity exempted in an earlier year.

Sources

• The Code on Social Security, 2020 — Ministry of Labour & Employment
• S.O. 5319(E), 21 November 2025 — commencement of the Code — Ministry of Labour & Employment
• Social Security (Central) Rules, 2026 — G.S.R. 344(E) — Ministry of Labour & Employment
• FAQs on Labour Codes (30 December 2025) — Ministry of Labour & Employment
• Additional FAQs on Labour Codes (as on 16 March 2026) — Ministry of Labour & Employment
• Income-tax Act, 2025, as amended to 29 May 2026 — Income Tax Department
• Threshold limits under the Income-tax Act — Income Tax Department
• TV Today Network Ltd. v. Ankita Sodhi, W.P.(C) 6271/2019 (Delhi High Court, 20 February 2024) — Indian Kanoon
• Sreeja B. v. Regional Joint Labour Commissioner, W.P.(C) 13911/2012 (Kerala High Court, 5 March 2015) — Indian Kanoon
• BEML Ltd. v. Appellate Authority, W.P. 11678/2018 (Karnataka High Court, 29 June 2022) — Indian Kanoon
• Alvas Institute of Engineering v. State of Karnataka, W.P. 48825/2016 (Karnataka High Court, 28 June 2022) — Indian Kanoon

Reviewed 11 October 2026

Frequently asked questions

See also

• EPF Calculator — the other statutory benefit that builds up with your salary.
• Notice Period Calculator — the last working day after resigning, which decides your service.