How to use this calculator
- Enter your last basic pay + DA and your total monthly pay.
- Enter your years and months of service, and why the job ends.
- See your gratuity, and how it grows if you stay longer.
Source: Code on Social Security, 2020, sections 2(88), 53 and 54; Ministry of Labour and Employment, FAQs on Labour Codes (₹20 lakh limit, in force from 21 November 2025); Department of Pension & Pensioners’ Welfare OM of October 2025 (Central Government limit).
Frequently asked questions
How is gratuity calculated?
Monthly basic + DA ÷ 26 × 15 × years of service. 15 days’ wages are paid for each completed year, and a part year of more than six months counts as a full year. With ₹50,000 wages and 8 years 7 months of service, gratuity is ₹2,59,615.
What changed with the new labour code?
The Code on Social Security, 2020 replaced the Payment of Gratuity Act from 21 November 2025. Two changes matter most. First, “wages” must be at least 50% of your total pay: if allowances are more than half, the extra is added back. In the example this raises gratuity from ₹2,07,692 to ₹2,59,615. Second, fixed-term employees get gratuity pro rata, without the 5-year wait.
Do I get gratuity if I resign before 5 years?
Not if you resign or retire: the Code needs 5 years of continuous service. At 4 years 11 months, the gratuity is ₹0. The 5-year condition does not apply on death, disablement or the end of a fixed-term contract.
How much gratuity does a fixed-term employee get?
A pro-rata amount for the time worked. On the example pay, one year of a fixed-term contract gives ₹28,846.
Is there a limit on gratuity?
Yes. The Code caps it at an amount the Central Government notifies, now ₹20 lakh. Change it here if a new limit is notified. Your employer may pay more under your contract.
Is the limit higher for government employees?
Central Government civil employees under the CCS (Pension) Rules, 2021 and the CCS (Payment of Gratuity under NPS) Rules, 2021 have a limit of ₹25 lakh. Those rules do not cover banks, RBI, PSUs, port trusts, universities, autonomous bodies or State Governments; they follow their own rules or the Code. If the CCS rules apply to you, set the limit to ₹25 lakh.
Is gratuity taxable?
Gratuity paid under the gratuity law is tax-free up to the limit set under the Income-tax Act; anything above it is taxed as salary. Check Form 16 or ask your employer for the exact taxable part.