Estimate gratuity using your applicable monthly wages and service period. Read the assumptions below before using the result for financial planning.
This calculator provides a simplified formula estimate. It does not determine legal eligibility, the amount your employer must pay or your taxable income. The applicable wage base, service rules, payment ceiling and employment terms can change the outcome.
Gratuity Calculator
This simplified mode is for ordinary monthly-rated employees covered by the gratuity provisions. It does not assess government, fixed-term, death, disablement, working-journalist, seasonal or piece-rated cases, or disputed continuous service.
For exits on or after 21 November 2025, use wages calculated under section 2(88) of the Code on Social Security, 2020. Basic pay plus DA alone may be insufficient because retaining allowance and statutory add-backs can apply. Confirm this figure with payroll.
Enter completed whole years and additional months separately. Do not round the years yourself.
Years used in this estimate:
This figure is before any applicable payment ceiling. It is not a statement of what your employer must pay. A statutory ceiling or better contractual terms may change the payable amount. Tax is not calculated here.
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What is Gratuity?
Gratuity is a lump-sum benefit linked to employment and service. The amount and eligibility depend on the applicable provisions and employment terms.
Who is Eligible to Receive Gratuity?
Five years of continuous service is generally required, with exceptions including death, qualifying disablement and expiry of fixed-term employment. Working journalists have a separate three-year provision. Continuous service can include specified interruptions; it does not require perfect attendance.
Coverage depends on the establishment and its employment history; current headcount alone does not decide it.
Claims involving four years and 240 days require assessment of the applicable continuous-service rules and facts. This calculator does not decide them.
Direct fixed-term employees can qualify after one year under the applicable rules. Employment through a contractor is not automatically fixed-term employment. This simplified calculator does not calculate these special cases.
What is a Gratuity Calculator, and How Does It Help You?
Useful for planning: see an illustrative result based on the inputs and stated assumptions. Check the applicable rules and your employer’s calculation before relying on it.
How is Gratuity Calculated? (Gratuity Formula)
For an eligible monthly-rated employee covered by the ordinary rule, the formula before the applicable ceiling is: monthly wages × 15 ÷ 26 × service years used. A final period exceeding six months counts as another year. Exactly six months does not. This rounding does not itself establish eligibility.
For exits on or after 21 November 2025, use wages calculated under section 2(88) of the Code on Social Security, 2020. Basic pay plus DA alone may be insufficient because retaining allowance and statutory add-backs can apply. Confirm this figure with payroll.
How to Use the PaisaSeekho Gratuity Calculator
Select your employment case, then enter the applicable monthly wages. Enter completed whole years and additional months separately. Do not round the years yourself. Read the result warning and check the applicable rules before using the estimate.
FAQs
1. Is the gratuity calculator free to use?
Yes, you can use it any number of times.
2. I have worked for 16 years and 4 months. How many years will be used?
For this ordinary formula illustration, 16 years are used. An additional period must exceed six months to count as another year. This rounding does not decide legal eligibility.
3. Can the calculator compute ex-gratia payments?
This tool does not calculate discretionary ex-gratia payments or benefits under an individual employer agreement. It provides only the formula illustration described above.
4. Is ₹25 lakh tax-free for private-sector employees?
For non-government employees, eligible gratuity receives tax relief up to ₹20 lakh, subject to the applicable calculation and other conditions. Previous gratuity exemptions may reduce the available relief. Specified government gratuity has separate treatment. The ₹25 lakh ceiling under certain Central Government retirement/death gratuity rules does not raise the private-sector tax-free limit.
5. Can I receive gratuity before five years?
The usual five-year condition has exceptions, including death, qualifying disablement and expiry of fixed-term employment. Working journalists have a separate three-year provision. This calculator does not determine entitlement in these cases or resolve disputed continuous service.
Official Sources
Code on Social Security, 2020: sections 2(88), 53 and 54; Ministry of Labour additional FAQs, March 16, 2026; Income Tax Department: section 19; CBDT notification on the ₹20 lakh limit; Central Government retirement/death gratuity ceiling announcement.
Last Updated on 4 weeks ago by Team Paisaseekho
