Gratuity Calculator
Calculate your gratuity under the Payment of Gratuity Act, 1972, as updated by the Labour Codes (effective 21 November 2025).
Fill this in if your Basic + DA is less than half your total pay — the 50% wage rule may raise your effective gratuity wage base.
Gratuity payable
₹2,07,692
How your gratuity grows with tenure
| Years of service | Gratuity payable |
|---|---|
| 1 yr | ₹0 |
| 2 yrs | ₹0 |
| 3 yrs | ₹0 |
| 5 yrs | ₹1,29,808 |
| 7 yrs | ₹1,81,731 |
| 10 yrs | ₹2,59,615 |
| 15 yrs | ₹3,89,423 |
| 20 yrs | ₹5,19,231 |
| 25 yrs | ₹6,49,038 |
How gratuity is calculated
Gratuity is a lump-sum payment your employer owes you for long-term service, under the Payment of Gratuity Act, 1972. The formula itself hasn't changed under the new Labour Codes:
The "wage base" is your last drawn Basic salary plus Dearness Allowance — not your full CTC. Two things changed when the Labour Codes took effect on 21 November 2025:
Fixed-term employees now qualify for gratuity after just 1 year of continuous service, on a pro-rata basis, instead of waiting for the standard 5-year threshold that still applies to permanent employees.
The 50% wage rule: if your allowances (HRA, special allowance, and similar components) add up to more than half your total pay, the excess now gets added back into the wage base used for this calculation. In practice, this raises the gratuity entitlement for many private-sector employees whose salary structures lean heavily on allowances over basic pay.
Up to ₹20,00,000 of gratuity is exempt from tax under Section 10(10) for non-government employees; government employees get full tax exemption regardless of amount.
Frequently asked questions
For permanent employees, yes — 5 years of continuous service is the standard threshold. Fixed-term contract employees now qualify after just 1 year, on a pro-rata basis, following the Labour Codes that took effect on 21 November 2025.