Gratuity Calculator

Gratuity is a lump sum an employer pays an employee for long service, when they resign, retire or are laid off, or to their family on death. In India it's governed by the Code on Social Security, 2020, which replaced the Payment of Gratuity Act, and it's calculated from your last basic pay and the years you've worked.

This calculator applies the standard 15/26 formula for covered employers, or the 15/30 formula for others, counts your years correctly, checks eligibility for permanent and fixed-term employees, and splits the result into the tax-free and taxable parts.

For employers covered by the law, gratuity = last monthly basic + DA × 15 × years of service ÷ 26. It's 15 days' wages for every year, with a month counted as 26 working days. A final part-year of more than six months counts as a full year.

For employers not covered, the usual formula is 15/30 of the average of the last ten months' salary for each completed year. Under the labour codes in force since 21 November 2025, fixed-term employees qualify after one year instead of five. Up to ₹20 lakh of gratuity is tax-free for private-sector employees.