Gratuity Calculator
Work out the gratuity payable when your job ends, under the Code on Social Security, 2020, from your wages, other pay and years of service.
Researched by Mirza Seraj BaigFacts last checked against official sources on 15 September 2026Per month, as last drawn. Include retaining allowance if you get one.
HRA, conveyance, overtime, commission and other allowances. If they are more than half your total pay, the excess counts as wages.
More than 6 months counts as a full extra year.
Gratuity payable
₹2,59,615
≈ 2.60 lakh
- Wages used
- ₹45,000
- Added back from other pay
- None
- Years counted
- 10 years
- Ceiling applied
- No
What is gratuity?
Gratuity is a lump sum an employer pays when your employment ends after long service — on superannuation, retirement or resignation, death or disablement, or at the end of a fixed-term contract. It is governed by the Code on Social Security, 2020, which replaced the Payment of Gratuity Act, 1972; the Ministry of Labour applies it from 21 November 2025.
It becomes payable after five years of continuous service, or after at least one year on a fixed-term contract, and without any minimum where employment ends due to death or disablement. It covers every factory, mine, oilfield, plantation, port and railway company, and every shop or establishment with ten or more employees in the preceding twelve months.
Gratuity is 15 days' wages for every completed year of service, or part of a year over six months, capped at ₹20 lakh. Wages mean basic pay, dearness allowance and any retaining allowance — plus whatever part of your other pay exceeds half of your total pay.
Your provident fund is a separate benefit from gratuity. Project your EPF balance with the EPF calculator.
How is Gratuity calculated?
Gratuity = wages ÷ 26 × 15 × years of service, capped at ₹20 lakh. Wages are basic pay plus dearness allowance and retaining allowance; if other pay is more than half of total pay, the excess is added to wages. A final part year of more than six months counts as a full year. It is payable after five years of continuous service, or at least one year on a fixed-term contract, with no minimum where employment ends due to death or disablement.
Gratuity calculation example: ₹50,000 wages, 10 years 7 months
Your basic pay plus DA is ₹50,000 a month and your other pay is ₹30,000. Other pay is less than half of the ₹80,000 total, so nothing is added back. You have served 10 years and 7 months; the final 7 months are more than six, so they count as a full year: 11 years.
Gratuity = ₹50,000 ÷ 26 × 15 × 11 = ₹3,17,308. With 10 years and 6 months the six months would not count, and gratuity would be ₹2,88,462.
Now say basic pay plus DA is ₹40,000 and other pay is ₹60,000. Half of the ₹1,00,000 total is ₹50,000, so the ₹10,000 of other pay above that is added to wages. Gratuity for 10 years is worked out on ₹50,000: ₹2,88,462.
Gratuity table by wages and years of service
Wages means basic pay plus dearness allowance, after any add-back from other pay. Amounts are capped at ₹20 lakh.
| Wages per month | 5 years | 10 years | 15 years | 20 years | 25 years |
|---|---|---|---|---|---|
| ₹20,000 | ₹57,692 | ₹1,15,385 | ₹1,73,077 | ₹2,30,769 | ₹2,88,462 |
| ₹30,000 | ₹86,538 | ₹1,73,077 | ₹2,59,615 | ₹3,46,154 | ₹4,32,692 |
| ₹50,000 | ₹1,44,231 | ₹2,88,462 | ₹4,32,692 | ₹5,76,923 | ₹7,21,154 |
| ₹75,000 | ₹2,16,346 | ₹4,32,692 | ₹6,49,038 | ₹8,65,385 | ₹10,81,731 |
| ₹1,00,000 | ₹2,88,462 | ₹5,76,923 | ₹8,65,385 | ₹11,53,846 | ₹14,42,308 |
Frequently asked questions
How is gratuity calculated in India?
Under the Code on Social Security, 2020, gratuity is 15 days' wages for every completed year of service, where 15 days' wages means monthly wages ÷ 26 × 15. A final part year of more than six months counts as a full year, and the total is capped at ₹20 lakh.
How many years of service are needed for gratuity?
Five years of continuous service, or at least one year on a fixed-term contract. No minimum applies where employment ends due to death or disablement.
How are part years counted for gratuity?
A final part year of more than six months counts as a full year; six months or less is not counted. This calculator follows that rule.
Has the Payment of Gratuity Act, 1972 been replaced?
Yes. Gratuity is now governed by the Code on Social Security, 2020, which replaced the 1972 Act. The Ministry of Labour's FAQs say gratuity is worked out under the Code, using its definition of wages, from 21 November 2025.
Is gratuity taxable?
Gratuity is deducted from salary income under section 19 of the Income-tax Act, 2025, in both the new and the old tax regime. Death-cum-retirement gratuity of government employees is fully deductible. Gratuity paid under the Payment of Gratuity Act is deductible up to the amount that Act's formula gives. Any other gratuity is deductible up to the least of the gratuity received, a limit the Central Government notifies, and half a month's average salary for each completed year of service. The notified limit is not stated in the Act, so check it with the Income Tax Department.
How much gratuity will I get for 5 years on a ₹30,000 salary?
If ₹30,000 is your basic pay plus DA and your other pay is not more than half of your total pay: ₹30,000 ÷ 26 × 15 × 5 = ₹86,538.
What counts as wages for gratuity?
Basic pay, dearness allowance and retaining allowance. HRA, conveyance, overtime, commission and similar pay are left out, but if they come to more than half of your total pay, the excess is added to wages under section 2(88) of the Code on Social Security, 2020.
Do fixed-term employees get gratuity?
Yes. An employee on a fixed-term contract becomes eligible after at least one year of service, and a further period of more than six months counts as another year.