Gratuity Calculator India 2025-2026

Free gratuity calculator India online to calculate gratuity amount instantly. Uses Payment of Gratuity Act formula: (Salary × 15 × Years) / 26. Check eligibilit...

Use our free gratuity calculator India online to calculate gratuity amount instantly. This gratuity benefit calculator for employees helps you determine your gratuity entitlement based on last drawn salary and years of service. Perfect for employees planning retirement, understanding gratuity benefits, and calculating retirement corpus.

Gratuity Calculator India 2025-2026

Calculate your gratuity amount based on Payment of Gratuity Act, 1972. Check eligibility, maximum limit (₹20L for private sector), tax implications, and get detailed breakdown instantly.

🆕 Major Gratuity Law Change — Effective November 21, 2025

  • Fixed-Term Employees: Now eligible for gratuity after just 1 year of service (was 5 years). Covers IT contractors, gig workers, project-based employees. (Code on Social Security, 2020)
  • 50% Wage Rule: Gratuity is now calculated on minimum 50% of CTC as "wages" — if your basic+DA is less than 50% of CTC, the higher amount applies. This increases gratuity payout by up to 67% for employees with low basic salary structures.
  • Permanent Employees: 5-year rule unchanged.
  • Employer Penalty: Payment within 30 days mandatory. 10% interest penalty on delayed payments.

Source: Code on Social Security, 2020 — notified Nov 21, 2025 | Ministry of Labour →

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Get professional PDF with complete gratuity breakdown and tax calculations

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Tax Implications

Understand tax-free limit (₹20L) and taxable amount calculations

Enter Your Details

₹

Your last drawn monthly basic salary

💡 New 50% Wage Rule (Nov 2025): Under the Code on Social Security 2020, wages for gratuity must be minimum 50% of your total CTC. If your basic+DA is less than 50% of CTC, enter 50% of your monthly CTC here for accurate calculation.
Example: CTC ₹1,00,000/month → Enter ₹50,000 (if basic is less than ₹50,000)

Complete years of service (0-50)

Additional months (0-11)

Additional days (0-30)

Gratuity Calculator India: 15/26 Formula, Eligibility & Tax for FY 2025-26

Gratuity is a retirement benefit under the Payment of Gratuity Act, 1972. The formula is: Gratuity = (Last Drawn Salary × 15 × Years of Service) / 26. The "15" represents 15 days of salary per completed year; "26" is the working days per month as per the Act. Salary means Basic + Dearness Allowance only.

Eligibility: Permanent employees need 5 years of continuous service. Fixed-term employees are now eligible after just 1 year under the Code on Social Security, 2020 (effective Nov 21, 2025). Death or disability: no minimum service required. Private sector cap: ₹20 lakhs (₹20,00,000). Central Govt: ₹25L (Jan 2024). PSU/State Govt/Banks: ₹20L. Tax exemption: ₹20 lakhs are tax-free under Section 10(10); amounts above are taxable.

Example: For ₹50,000 salary and 10 years service: Gratuity = (50,000 × 15 × 10) / 26 = ₹2,88,462. Use our EPF Calculator and PPF Calculator to plan your full retirement corpus including gratuity.

What is Gratuity?

Gratuity is a retirement benefit paid by an employer to an employee as a token of gratitude for the services rendered. It is governed by the Payment of Gratuity Act, 1972 in India. Gratuity is a statutory right of an employee. Permanent employees: payable after 5 years of continuous service. Fixed-term employees: eligible after 1 year (Code on Social Security, 2020, effective Nov 21, 2025). Death or disability: no minimum service required.

💡 Key Features:

  • Statutory right under Payment of Gratuity Act, 1972
  • Permanent employees: 5 years continuous service required. Fixed-term employees: 1 year (New Labour Code, Nov 2025)
  • Tax-free up to ₹20,00,000 for private sector employees
  • Central Govt employees: ₹25,00,000 (effective Jan 1, 2024, per 7th Pay Commission). PSU/State Govt/Banks: ₹20,00,000. Private sector: ₹20,00,000.
  • Must be paid within 30 days of eligibility
  • Formula: (Monthly Salary × 15 × Years of Service) / 26

Gratuity Calculation Formula

The gratuity calculation formula is standardized under the Payment of Gratuity Act:

Formula:

Gratuity = (Monthly Salary × 15 × Years of Service) / 26

Where:

  • Monthly Salary: Basic Salary + Dearness Allowance (DA)
  • 15: Days of gratuity per completed year of service
  • 26: Working days per month (as per Gratuity Act)
  • Years of Service: Total service period (rounded up if months ≥ 6)

Frequently Asked Questions

Disclaimer: This calculator provides an estimate based on the Payment of Gratuity Act, 1972 and current rules as of 2025. Actual gratuity may vary based on company policy, state rules, and individual employment terms. For exact calculation, consult your HR department or a tax professional. Maximum limit: ₹20,00,000 for private sector employees (as per Payment of Gratuity Amendment Act, 2018). This calculator is for informational purposes only and should not be considered as financial or legal advice.

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About Gratuity Calculator India 2025-2026

Use our free gratuity calculator India online to calculate gratuity amount instantly.

This gratuity benefit calculator for employees helps you determine your gratuity entitlement based on last drawn salary and years of service.

Perfect for employees planning retirement, understanding gratuity benefits, and calculating retirement corpus.

Our calculator automatically applies the gratuity formula: (Last Drawn Salary × 15 × Years of Service) / 26, with maximum limit of ₹20 lakhs for private sector employees.

Get instant results showing gratuity amount, calculation breakdown, and tax implications.

✅ Common Use Cases

  • Calculate gratuity amount for retirement planning
  • Understand gratuity benefits for employees
  • Plan retirement corpus including gratuity
  • Compare gratuity across different service periods
  • Determine gratuity entitlement for job changes

💡 Key Benefits

  • Automatic gratuity formula calculation
  • Maximum limit consideration (₹20 lakhs)
  • Years of service tracking
  • Last drawn salary based calculations
  • Free and instant calculations with no registration required

How to Use Gratuity Calculator India 2025-2026

1️⃣

Choose your calculator

Navigate to the Gratuity Calculator India 2025-2026 page and familiarize yourself with the input fields.

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Enter your values

Input your data into the calculator fields. All inputs are validated in real-time.

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View instant results

The calculator instantly displays comprehensive results with detailed breakdowns.

🔬 How Gratuity Calculator India 2025-2026 Works

📐 Formula

Gratuity = (Last Basic + DA) × 15/26 × Years of Service

Gratuity Formula (Payment of Gratuity Act, 1972): 15/26 = 15 working days out of 26 working days per month. Minimum 5 years continuous service required. Maximum limit: ₹20,00,000 (private sector). Government employees: No ₹20L cap.

Variables:

  • Last Basic + DA: Monthly salary at last drawn
  • 15/26: 15 working days per year of service
  • Years: Complete years of service

📋 Step-by-Step Calculation Process

1

Worked Example

Last Basic + DA: ₹50,000/mo. Years of Service: 10 years

2

Calculation

Gratuity = ₹50,000 × 15/26 × 10 = ₹50,000 × 0.5769 × 10 = ₹2,88,462

3

Tax Status

Tax-free up to ₹20L (Section 10(10)). Amount within limit = fully exempt.

⌨️ Understanding Input Fields

Monthly Salary₹

Basic + DA (min 50% of CTC, new Labour Code)

Years of Serviceyears

Complete years (months ≥ 6 rounds up)

📊 Understanding Your Results

Key Rules: Minimum 5 years continuous service required. Maximum limit: ₹20,00,000 (private sector). Government employees: No ₹20L cap. 15/26 = 15 working days out of 26 working days/mo. Tax-free up to ₹20L (Section 10(10)).

Key Metrics Explained:

  • Gratuity Amount: Calculated per 15/26 formula. Compare with max limit to see if capped.
  • Tax-Free: Up to ₹20L under Section 10(10).

What to Do Next:

  • Add gratuity to EPF Calculator to see total retirement corpus
  • Include gratuity in Income Tax Calculator as exempted income under Section 10(10)
  • Check with HR: Is your basic+DA ≥ 50% of CTC?

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PPF maturity. Plan retirement with gratuity + EPF + PPF.

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India Income Tax Calculator FY 2025-26

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