Calculate your gratuity amount using the 15 days' wages for each year of service formula. Gratuity is usually payable after 5 years of continuous service. For fixed-term employees the Code on Social Security, 2020 provides pro-rata gratuity on expiry of the contract (section 53), and the Labour Ministry's FAQs state eligibility after one year of service under the contract; this calculator itself works from 5 years.
| Wages (Monthly, as entered) | — |
| Total Service | — |
| Rounded Tenure Used | — |
| Formula Used | — |
| Gratuity Amount | — |
| Tax Exemption Limit | Unavailable (not confirmed) |
| Taxable Gratuity | — |
Assumption notice: this page shows a scenario estimate. The 15/26 divisor and the rounding of part years are conventions carried over from the earlier Act. The Labour Ministry handbook describes 15 days' wages for each completed year, the Ministry FAQs mention a part year over six months, and neither states the 26-day divisor. Your actual gratuity depends on your employer's wage definition and the Code rules, so confirm with your employer or the Labour Ministry.
Gratuity = Wages × 15/26 × Years of Service
The factor 15/26 represents 15 working days out of 26 working days in a month. Section 4(2) of the Payment of Gratuity Act, 1972 (Act text) and section 53(2) of the Code on Social Security, 2020 both count a part of a year in excess of six months as a full year. The Labour Ministry's FAQs say gratuity under the Labour Codes applies from 21 November 2025, and the Code has its own definition of wages (section 2(88): wages start from all remuneration, and excluded components such as HRA are added back to the extent they exceed 50% of total remuneration), so use the wages figure your employer applies. This calculator rounds up at 7 or more additional months and does not count days.
Gratuity = Wages × 15/30 × Years of Service
This is an alternative assumption, not a statutory formula confirmed here: 30 days per month are used instead of 26, only completed years count, and no payout cap is applied. It is only a scenario for comparison. Check what your employer or contract actually applies.
This page does not calculate tax on gratuity. The payout ceiling is a labour-law limit; the Labour Ministry's FAQs on the Labour Codes say the maximum gratuity is as notified by the Central Government and is currently ₹20 lakh. How much gratuity is exempt from income tax for tax year 2026-27 is not confirmed here, so check the current rules on incometaxindia.gov.in or with a tax professional.
Q: Is gratuity mandatory?
A: The Code on Social Security, 2020 (Chapter V, section 53) covers factories, mines, oilfields, plantations, ports, railway companies, and shops or establishments with 10 or more employees, plus any others notified. Whether you are covered depends on your employer and your service, so confirm with your employer.
Q: What if I resign before 5 years?
A: In general you need 5 years of continuous service, except in case of death or disability. For fixed-term employees the Code on Social Security, 2020 provides pro-rata gratuity on contract expiry; the Labour Ministry's FAQs state eligibility after one year of service under the contract. Working journalists have a 3-year threshold under section 53(1); this calculator does not model that case.
Q: When must gratuity be paid?
A: Within 30 days from the date of leaving the job. Delayed payment attracts interest.
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