Free tool
Gratuity calculator
Gratuity is 15 ÷ 26 × last monthly basic pay plus DA × years of service, paid after 5 years (1 year for fixed-term employees) and capped at ₹20 lakh. Enter the last wages and service to see what an employee is owed under the Code on Social Security.
Gratuity payable
₹0
Years counted
15 ÷ 26 × wages × years
Ceiling₹20,00,000
Estimates for general information, using rules checked 22 October 2026. Not tax or legal advice. Nothing you enter leaves your browser.
How it is worked out
Gratuity is 15 days' wages for every completed year of service, with a month counted as 26 working days: 15 ÷ 26 × last monthly wages × years. Wages mean basic pay plus dearness allowance.
A part year of more than six months counts as a full year, so 7 years and 8 months counts as 8. Regular employees need at least 5 years of continuous service, except on death or disablement. Fixed-term employees qualify after 1 year and are paid for the exact time served.
The ceiling remains ₹20,00,000 until a new one is notified, and gratuity up to that amount is tax-free for private-sector employees. It must be paid within 30 days of becoming due.
For the formula step by step, eligibility and what the labour codes change, read how to calculate gratuity in India.
Sources · checked 22 October 2026