Gratuity Calculator India
Enter your last-drawn monthly wages and service period to estimate gratuity using the standard 15/26 formula under the current labour-code framework.
How to Use the Gratuity Calculator
Choose Years & Months when you already know your service period. Enter the last-drawn monthly wage amount applicable for gratuity, completed years and any additional whole months. Choose Joining & Leaving Dates when you want the calculator to work out the calendar service period for you.
The calculator is intentionally focused on an ordinary monthly-rated employee. It does not ask for CTC, HRA, PF, tax regime, employment type or exit reason. Special cases such as fixed-term employment, seasonal work, piece-rated work, death or disablement need legal treatment beyond this simple 15/26 estimate.
Gratuity Formula in India
Estimated Gratuity = Last Drawn Monthly Wages × 15 ÷ 26 × Counted Years of Service
Section 53 of the Code on Social Security, 2020 provides the standard 15-days-of-wages formula for each completed year of service or part of a year in excess of six months. For a monthly-rated employee, the Code clarifies that fifteen days' wages are calculated by dividing the monthly rate of last-drawn wages by 26 and multiplying by 15.
What Is the 15/26 Formula?
The fraction 15/26 converts a qualifying monthly wage into fifteen days' wages for the statutory gratuity formula. It is approximately 57.6923% of one month's qualifying wage for each counted service year. Expressed against a full year of the same wage, that is approximately 4.8077%, which is why some CTC structures show a gratuity provision near 4.81% of annual qualifying wages.
That percentage is only a provisioning shortcut. Actual statutory gratuity depends on the last-drawn wage definition, counted service, eligibility, the applicable ceiling and any better award, agreement or contract terms.
Which Salary or Wages Are Used for Gratuity?
The main form asks for Last Drawn Monthly Wages rather than CTC or gross salary. Current Labour Code guidance says wages include core components such as Basic Pay, Dearness Allowance and Retaining Allowance where applicable. It also applies an allowance add-back mechanism where excluded allowances exceed the applicable 50% threshold.
For that reason it is incomplete to state that gratuity is always calculated only on Basic + DA, and it is also too simplistic to say gratuity wages are always 50% of CTC. CTC can contain employer-side statutory contributions and other items that need separate treatment.
What Changed Under the New Labour Codes?
The four Labour Codes, including the Code on Social Security, 2020, came into force on 21 November 2025. Ministry guidance confirms that gratuity using the revised wage definition applies from that date. The Social Security (Central) Rules, 2026 were notified on 8 May 2026 and superseded the old Payment of Gratuity (Central) Rules, 1972, subject to the Gazette's savings language.
The practical change for this calculator is not a new 15/26 arithmetic formula; it is the current legal framework and wage definition around that formula. The page therefore does not present the Payment of Gratuity Act, 1972 as the sole current law.
How the 50% Wage Rule Can Affect Gratuity
Ministry FAQs explain that if excluded allowances and benefits exceed 50% of remuneration, the excess is added back to wages for statutory purposes. This can increase the wage base used for gratuity for some salary structures. It does not mean every employee's gratuity wage automatically becomes exactly half of CTC, and it does not mean the new rule automatically increases everyone's gratuity.
How Years of Service Are Counted
For amount calculation, Section 53 uses completed years plus any remaining part of service that is in excess of six months. This is not ordinary mathematical rounding. Ten years and five months counts as 10 years. Ten years and seven months counts as 11 years.
Does Exactly Six Months Round Up?
No. The statutory wording is “part thereof in excess of six months.” Exactly six months is not more than six months. Therefore 10 years and exactly 6 months remains 10 counted years. In date mode, even one additional calendar day after the six-month anniversary makes the remainder exceed six months and the calculator counts the next year for the amount formula.
Who Is Normally Eligible for Gratuity?
For an ordinary employee, the standard route generally requires not less than five years of continuous service when employment ends on superannuation, retirement or resignation. Eligibility is a separate question from the amount-rounding rule. A service period such as 4 years and 8 months may produce 5 counted years for the mathematical amount, but that does not automatically prove the ordinary five-year eligibility condition has been satisfied.
The five-year requirement is not necessary when employment ends because of death or disablement. Fixed-term employment and certain other categories also have special provisions.
Is 4 Years and 240 Days Enough for Gratuity?
Do not treat “4 years and 240 days” as an automatic universal switch in an online calculator. Continuous-service rules, older case law, working patterns and the facts of the employment can matter. This page therefore does not hard-code 4 years 240 days as “eligible.” If your case turns on that issue, check the current statutory continuous-service provisions and obtain employment-law advice where necessary.
Fixed-Term Employee Gratuity
Current Ministry guidance says a directly engaged Fixed Term Employee becomes eligible for gratuity after rendering service under the contract for one year from the start of the contract. Section 53 also provides pro-rata treatment for fixed-term employment. Because that is not the same as the ordinary rounded-years workflow, this calculator does not silently apply its standard result as an exact fixed-term payout.
Gratuity on Death or Disablement
Section 53 removes the ordinary five-year completion requirement where employment ends because of death or disablement. In the case of death, payment follows the statutory nominee or heir provisions. The calculator leaves these circumstances out of the main form so a simple amount calculator does not become an employment-law questionnaire.
Gratuity for Working Journalists
Section 53 provides a special threshold for the qualifying working-journalist category: the five-year expression is treated as three years. The main calculator does not ask whether the user is a journalist because the ordinary monthly-rated workflow should remain simple.
Seasonal and Piece-Rated Employees
Seasonal employment can use a different statutory rate: the Code provides seven days' wages for each season for an applicable seasonal employee who is not employed throughout the year. Piece-rated employees also have special wage-computation provisions based on preceding wages. This page is therefore primarily for ordinary monthly-rated employees.
Current Gratuity Ceiling
The standard statutory ceiling used for this non-government employee calculator is ₹20,00,000. The Ministry notification that raised the ceiling from ₹10 lakh to ₹20 lakh was S.O. 1420(E) dated 29 March 2018. Current 2026 public material continues to treat ₹20 lakh as the ordinary statutory baseline, while particular awards or settlements can provide more.
Section 53 preserves an employee's right to better gratuity terms under an award, agreement or contract. Therefore, when the raw formula exceeds ₹20 lakh, the calculator shows the raw formula amount and separately applies ₹20 lakh as the standard statutory payable estimate rather than silently deleting the excess.
Government Employees Use Different Rules
Do not use this page for Central Government retirement or death gratuity. Government-service gratuity is governed by separate service rules and currently has different ceiling treatment. For government service, use the Government Retirement Gratuity Calculator.
Gratuity in CTC vs Actual Gratuity Payable
An employer may show a gratuity provision inside CTC, often based on a conventional annual accrual estimate. That line is not the same as a monthly deduction from your salary and it is not automatically the amount payable when you leave. Actual statutory gratuity depends on qualifying wages, service, entitlement rules, ceiling treatment and better contractual terms.
Is Gratuity Taxable?
Payable gratuity and tax-exempt gratuity are separate legal concepts. Current Income Tax Department e-filing material for non-government/other categories continues to reflect a ₹20 lakh exemption ceiling under the relevant gratuity exemption provision, subject to the applicable conditions. Government-employee tax treatment differs. This calculator deliberately does not add tax calculations to the main form.
Gratuity Calculation Examples
| Last-drawn wages | Actual service | Counted service | Formula amount |
|---|---|---|---|
| ₹60,000 | 10 years 8 months | 11 years | ₹3,80,769.23 |
| ₹50,000 | 10 years 5 months | 10 years | ₹2,88,461.54 |
| ₹50,000 | 10 years 6 months exactly | 10 years | ₹2,88,461.54 |
| ₹50,000 | 10 years 7 months | 11 years | ₹3,17,307.69 |
Common Gratuity Calculation Mistakes
- Using total CTC directly as the gratuity wage.
- Saying gratuity is always only Basic + DA without the current wage-definition context.
- Using the old ₹10 lakh ceiling.
- Rounding exactly six months upward.
- Confusing eligibility with the counted-years amount rule.
- Hard-coding 4 years 240 days as universally eligible.
- Applying the ordinary five-year statement blindly to fixed-term employees.
- Treating a CTC gratuity provision as a monthly salary deduction.
- Mixing private-sector gratuity with government-service retirement gratuity.
- Confusing the statutory payable ceiling with the income-tax exemption limit.
- Ignoring better terms under an award, agreement or employment contract.
Frequently Asked Questions
How is gratuity calculated in India?
For an ordinary monthly-rated employee, the standard formula is last-drawn monthly wages × 15 ÷ 26 × counted years of service, subject to eligibility, the statutory ceiling and any better contractual terms.
What is the 15/26 gratuity formula?
It represents fifteen days' wages for each counted year, using 26 as the monthly divisor specified for a monthly-rated employee under Section 53.
Which salary is used for gratuity?
Use the applicable last-drawn statutory wage amount, not CTC. Basic Pay, DA and retaining allowance are core components, while current wage-definition rules can add back excess excluded allowances.
Is gratuity always calculated only on Basic + DA?
Not necessarily. That can be a useful starting point for many salary structures, but current Labour Code wage-definition rules can affect the statutory wage base.
What is the 50% wage rule?
Where excluded allowances exceed the applicable 50% limit of remuneration, the excess is added back to wages for statutory purposes. It should not be simplified to “wages always equal 50% of CTC.”
How many years must I work to receive gratuity?
The ordinary statutory route generally requires not less than five years of continuous service, but death, disablement, fixed-term employment, working-journalist treatment and other statutory cases can differ.
Does exactly 6 months count as another year?
No. Section 53 says a part-year must be in excess of six months. Exactly six months therefore does not round up for the amount formula.
What if I work 10 years and 7 months?
The amount formula counts 11 years because the remaining part exceeds six months.
Is 4 years and 240 days always enough for gratuity?
No universal automatic rule is built into this calculator. Continuous-service provisions, facts and case law can matter, so the issue should be assessed carefully.
Can fixed-term employees receive gratuity after one year?
Current Ministry guidance says a directly engaged Fixed Term Employee is eligible after rendering service under the contract for one year from the start of the contract.
Is five years required after death or disablement?
No. Section 53 removes the ordinary five-year completion requirement where employment ends because of death or disablement.
What is the gratuity rule for working journalists?
For the qualifying working-journalist category under Section 53, the five-year expression is treated as three years.
What is the current maximum gratuity used by this calculator?
The standard statutory estimate is capped at ₹20,00,000 for this ordinary non-government employee calculator. Better terms under an award, agreement or contract may provide more.
Can an employer pay more than the statutory ceiling?
Yes. Section 53 preserves better gratuity terms under an award, agreement or contract with the employer.
Is gratuity part of CTC?
Many employers include an estimated gratuity provision in CTC, but that provision is not automatically the gratuity payable when employment ends.
Is gratuity deducted from salary every month?
A gratuity provision shown in CTC is generally an employer-side provision, not the same as a monthly employee deduction from take-home salary.
Is gratuity taxable?
Tax treatment depends on the relevant employee category and exemption rules. This calculator estimates gratuity payable and does not calculate income tax.
Is this calculator suitable for Central Government employees?
No. Central Government retirement and death gratuity use separate service rules. Use the dedicated Government Retirement Gratuity Calculator.
What happens if my formula amount exceeds ₹20 lakh?
The calculator shows the full mathematical formula amount and separately shows ₹20 lakh as the standard statutory estimate. Better employment terms may permit a higher payment.
Are my salary details stored?
No. This implementation calculates locally in your browser and does not place wage or service values in URL parameters, local storage or session storage.
Official Sources & Methodology
This calculator provides an estimate for an ordinary monthly-rated employee based on the information entered. Actual entitlement can depend on continuous service, employment type, wage structure, contract terms, statutory exceptions and current notifications.