GreenFunds
Free tool

Gratuity Calculator

See the gratuity your employer pays when you leave after years of service, using the formula in the Code on Social Security, 2020.

Years counted 0
Gratuity amount ₹0

This is an illustration for a monthly-paid employee covered by the Code on Social Security, 2020. Your employer may pay more under your contract. Seasonal, piece-rated and fixed-term employees have their own rules, and if allowances outside basic pay and DA are more than half your pay, part of them counts as wages. Check the details with your employer. Up to 20 lakh rupees of gratuity over your career is usually tax-free, but the tax formula uses its own salary definition, so the tax-free part can be lower.

How this is calculated

Gratuity is 15 days' wages for every year of service. For a monthly-paid employee, one day's wage is the last monthly basic pay plus DA divided by 26, the working days in a month. So the formula is wage ÷ 26 × 15 × years. A part year of more than six months counts as a full year. The amount paid is capped at the limit the Central Government sets, 20 lakh rupees as per the Labour Ministry.

A worked example

Illustration: a last monthly basic pay plus DA of 50,000 rupees and 10 years 7 months of service. The 7 months round up, so 11 years count. Gratuity is 50,000 ÷ 26 × 15 × 11, about ₹3,17,308.

Read next

Questions people ask

How is gratuity calculated?

For a monthly-paid employee: last monthly wage divided by 26, times 15, times the years of service. Wage here means basic pay plus dearness allowance. A part year of more than six months counts as a full year, per the Code on Social Security, 2020.

After how many years do I get gratuity?

Usually after 5 years of continuous service. The 5-year condition does not apply on death or disablement, or when a fixed-term contract ends. The government says fixed-term employees qualify after 1 year of continuous service, paid pro rata. Check your own case with your employer.

Gratuity kitni milegi (how much gratuity will I get)?

Enter your last monthly basic pay plus DA and your years of service above. The calculator applies the 15 by 26 formula and the six-month rounding, and shows the amount.

Is gratuity tax-free?

For most private-sector employees, gratuity is tax-free up to the lowest of the amount received, a formula amount and 20 lakh rupees across your whole career. The 20 lakh limit was notified in 2019 and continues under the Income-tax Act, 2025. Retirement gratuity of government employees is fully tax-free.

More free calculators