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Calculators

Gratuity calculator

Put in your last basic pay plus DA and your years of service to see the gratuity due, whether you qualify yet, and how much of it is tax free.

₹
Under the labour codes, allowances above half of your pay are added back into wages.
years
months
More than 6 months counts as a full year if your employer is covered.
Gratuity due–
Tax free–
Taxable–
For each year–

Gratuity at your current pay, by years of service

The formula

For an employer covered by the law, gratuity is 15 days' wages for every year of service, with a month counted as 26 working days: last basic pay plus DA × 15 ÷ 26 × years. Service of more than 6 months in the final year counts as a full year. An employer not covered by the law, usually one with fewer than 10 staff, may still pay gratuity, often on a 30-day month and completed years only.

What the labour codes changed

The Code on Social Security, 2020 came into force on 21 November 2025, and its central rules were notified in May 2026.

  • Permanent staff still need 5 years of continuous service; some court rulings have counted 4 years and 240 days as enough. The 5 years do not apply on death or disablement.
  • Fixed-term employees qualify after 1 year, pro rata.
  • Wages now include allowances above half of your total pay. If your basic plus DA is less than half, the excess is added back, which raises gratuity.
  • Gratuity must be paid within 30 days of becoming due.

Tax

Private-sector employees can receive up to ₹20 lakh of gratuity tax free across their working life. Anything above is taxed as salary. Government employees' gratuity is fully exempt. Under the old Gratuity Act an employer had to pay at most ₹20 lakh. The Code lets the government set this ceiling and we could not find a new figure as of October 2026, so this calculator keeps ₹20 lakh as the cap.

Guides

Questions

Do I get gratuity if I leave after 4 years?

Usually not, if you are permanent. Some court rulings have counted 4 years and 240 days as 5 years. Fixed-term employees qualify after 1 year.

Is gratuity part of my CTC?

Many employers show a provision of about 4.81% of basic pay in the CTC. You receive it only when you leave after qualifying, so it is not part of monthly pay.

How is gratuity taxed?

Up to ₹20 lakh in a lifetime is tax free for private-sector employees. Government employees pay no tax on it.

Sources

For illustration only. Your employment contract and your employer's policy decide what is paid. This is not legal or tax advice.

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