Gratuity Calculator
Payable gratuity under the Code on Social Security, 2020.
The Gratuity Calculator computes gratuity payable under the Payment of Gratuity Act, 1972, now subsumed by the Code on Social Security, 2020. Gratuity is generally payable after 5 years of continuous service; the 5-year condition does not apply on death or disablement, and fixed-term employees qualify on a pro-rata basis after 1 year of continuous service. It is for employees estimating their entitlement and for employers and HR teams working out final settlements.
Use the Gratuity Calculator
Gratuity Computation
Compute gratuity payable under the Payment of Gratuity Act, 1972 (subsumed by Code on Social Security, 2020 effective 21 November 2025). Gratuity is generally payable after 5 years of continuous service; exceptions apply for death / disablement and for fixed-term employees.
- Eligibility: 5 years of continuous service. Not required on death or disablement. Fixed-term employees: pro-rata gratuity after 1 year of continuous service (Code on Social Security, 2020, effective 21 November 2025).
- Coverage: Establishments employing 10+ persons (factories, mines, oil fields, plantations, ports, railways, shops, establishments).
- Formula (non-seasonal): Last drawn Basic + DA × 15/26 × Years of service.
- Formula (seasonal): 7 days for each season worked.
- Rounding: A part of a year in excess of six months counts as a full year; six months or less is ignored (so 9.5 years counts as 9, 9.6 years as 10).
- Maximum: Rs 20 lakh (statutory ceiling).
- Tax treatment: Government (Central / State / local authority) employees: fully exempt. Other employees covered by the gratuity law: exempt up to the least of (i) 15 days' wages per year of service as computed above, (ii) Rs 20 lakh and (iii) the amount actually received; the excess is taxable as salary. Reference: Section 10(10) of the Income-tax Act, 1961 (up to tax year 2025-26) and Section 19 of the Income-tax Act, 2025 (from tax year 2026-27).
- Forfeiture: Permitted only for termination due to fraud, riotous behaviour, moral turpitude (Sec 4(6)).
- Time limit for payment: Within 30 days of leaving; interest @ 10% p.a. for delayed payment.
Frequently Asked Questions
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Due in the next 30 days
Labour- ESI Half-yearly Return of Contributions (Apr–Sep 2026)
- PF deposit (ECR + challan) for October
- ESI contribution for October
Full compliance calendar → Statutory dates, which can be extended by notification. General information only.