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Gratuity calculator
Estimate your gratuity in seconds: enter your joining date, last working day and last drawn basic + DA. See years counted, the formula used, the ₹20 lakh ceiling and whether the 5-year rule applies — in English and Hindi.
Enter your joining date, last working day and monthly basic + DA to see the estimate.
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How gratuity is calculated
- Gratuity = last drawn monthly wages (basic + DA) × 15 × completed years of service ÷ 26.
- The 26 stands for working days in a month. If your employer is not covered by the law, many policies use 30 instead.
- A part year of more than six months is counted as a full year — 7 years 7 months is counted as 8 years.
- Normally 5 years of continuous service is needed. This does not apply on death or disablement, and fixed-term employees qualify after 1 year.
- The maximum gratuity under the law is ₹20 lakh. Employers can pay more by contract.
Legal basis
Code on Social Security, 2020, Chapter V (Gratuity), Sections 53–58, in force from 21 November 2025, which replaced the Payment of Gratuity Act, 1972 (old Section 4 for eligibility and formula, Section 7 for claims). Wage definition: Section 2(88) of the Code. Ceiling: ₹20 lakh. Tax treatment of gratuity is separate — check with a tax professional.
Frequently asked questions
- What is the formula for gratuity in India?
- For employees covered by the law, gratuity is usually last drawn monthly wages (basic + DA) × 15 × completed years of service ÷ 26. A part year of more than six months counts as a full year. The legal ceiling is ₹20 lakh.
- Is 5 years of service compulsory for gratuity?
- On resignation or retirement, generally yes — 5 years of continuous service. It is not needed on death or disablement. Under the Code on Social Security, 2020, a fixed-term employee becomes eligible after 1 year of service under the contract.
- What changed for gratuity under the new labour codes from November 2025?
- The Code on Social Security, 2020 replaced the Payment of Gratuity Act, 1972 from 21 November 2025. Fixed-term employees qualify after 1 year, and a new 'wages' definition means that if allowances outside basic + DA are more than half of total pay, the extra is added back — which can raise gratuity for some employees.
- How long can an employer take to pay gratuity?
- Gratuity should be paid within 30 days of becoming payable. If it is delayed, simple interest can be payable. If it is not paid, you can apply to the Controlling Authority, usually the labour department office for your area.
- Does Adhiwakta file my gratuity claim?
- No. Adhiwakta is not a law firm and does not file claims or deal with employers. This calculator gives a free estimate, and you can ask a question on Adhiwakta or WhatsApp to understand your next step with a registered advocate.