Gratuity calculator · free How much gratuity is due?
Gratuity = last basic pay plus DA × 15 × years of service ÷ 26, payable once you've worked five years (one year on a fixed-term contract), up to ₹20 lakh. Enter your last salary and length of service to see whether you qualify yet, what you're owed, and the working step by step.
Updated · rules for FY 2026-27 (AY 2027-28)
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Under the labour codes, if allowances are more than half your pay, the excess counts as wages for gratuity.
Gratuity due
₹1,38,462
1.38 lakh rupees
How it's worked out
₹40,000 × 15 × 6 ÷ 26 = ₹1,38,462
How to use the Gratuity Calculator
- Enter your last drawn basic pay plus DA.
- Enter how long you've worked for the company, in years and months.
- Choose permanent or fixed-term employment and why you're leaving.
- Say whether the company has 10 or more employees, so the right formula is used.
- See whether you're eligible yet, the gratuity due, and the working step by step.
Worked example
A permanent employee leaves after 6 years and 4 months at a company of 10 or more people, on a last basic plus DA of ₹40,000 a month. These are the figures the calculator opens with.
| Last basic + DA | ₹40,000 |
| Years counted (the last 4 months don't round up) | 6 |
| ₹40,000 × 15 × 6 ÷ 26 | ₹1,38,462 |
With one more quarter, at 6 years and 7 months, the last part-year is over six months and counts as a full year: ₹40,000 × 15 × 7 ÷ 26 = ₹1,61,538.
If the company isn't covered by the Act (fewer than 10 employees) and pays gratuity anyway, only completed years count and a month is taken as 30 days: ₹40,000 × 15 × 6 ÷ 30 = ₹1,20,000.
How it's calculated
Gratuity is a thank-you for long service that the law requires. For every year you've worked, you get 15 days of wages.
Gratuity = last monthly wages × 15 × years of service ÷ 26
- Wages means basic pay plus dearness allowance. Under the labour codes in force since November 2025, if your allowances are more than half of your total pay, the part above half is added back to wages. Enter your total monthly pay to apply this.
- ÷ 26 because the law treats a month as 26 working days. Companies not covered by the law use 30 instead, and only count completed years.
- Years: if your last year has more than six months in it, it counts as a full year.
- Ceiling: the total is capped at ₹20 lakh.
Who qualifies
Permanent employees need five years of continuous service. Fixed-term employees qualify after one year under the Code on Social Security. If someone dies or is disabled, there's no minimum at all, and the amount goes to their nominee.
For private-sector employees, up to ₹20 lakh of gratuity over a working life is tax-free.
Rules used: section 4 of the Payment of Gratuity Act, 1972 (15 days' wages per year, 26-day month, five-year rule, ₹20 lakh ceiling), now part of the Code on Social Security, 2020, which adds the one-year rule for fixed-term employees and the 50% wage rule; tax exemption under section 10(10) of the Income-tax Act, 1961.
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