Gratuity calculator
Estimate gratuity as 15 days' wages for each completed year of service, using the 15/26 formula and the ₹20 lakh ceiling.
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Gratuity:
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How it works
Gratuity = last drawn monthly wages × 15 ÷ 26 × years of service. A part year of more than six months counts as a full year. For example, ₹52,000 a month for 10 years gives ₹3,00,000.
- Payable after at least five years’ continuous service, or earlier on death or disablement.
- Under the Code on Social Security 2020, fixed-term employees get gratuity pro rata after one year.
- Employees of seasonal establishments get 7 days’ wages for each season.
- The maximum is ₹20 lakh. The income-tax exemption for private-sector employees is also ₹20 lakh. Central Government employees have a ₹25 lakh ceiling under separate rules.
Things to know
- Payment within 30 days of it becoming due Needs review.
- This is a learning aid, not advice.
Sources
- Ministry of Labour: Payment of Gratuity Act, 1972
- PIB: gratuity ceiling raised to ₹20 lakh
- PIB: income-tax exemption for gratuity raised to ₹20 lakh
- PIB: labour codes in force from 21 November 2025
Last verified: 4 Nov 2026