India Gratuity
Estimate your gratuity with the 15/26 formula, check if you qualify and see how much of it is tax-free.
India — Code on Social Security, 2020, sections 53 and 54 (in force since 21 November 2025, replacing the Payment of Gratuity Act, 1972) and Income-tax Act, 2025, section 19. Rules in force on 10/24/2026.
Estimate for guidance only: check the official sources or a licensed professional before relying on it.
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Frequently asked questions
Why 15/26?
The law pays 15 days of wages for each year, and a month is taken as 26 working days. So one year of service is worth 15/26 of a monthly wage, about 57.7%.
How are the years counted?
Each completed year counts. In the last year, a part of more than six months counts as a full year; six months or less is dropped. For example 8 years and 7 months count as 9 years.
Do fixed-term employees get gratuity?
Yes. Under the Code on Social Security, 2020, fixed-term employees get gratuity in proportion to their service, and the Government set the qualifying service at one year instead of five.
Is gratuity taxable?
For employees covered by the gratuity law, the amount by the legal formula, up to ₹20 lakh in a lifetime, is tax-free in both regimes. For others the tax-free part is the least of the amount received, ₹20 lakh and half a month's average salary for each completed year.
Can gratuity be refused?
It can be forfeited, fully or partly, if the employment ended for damage caused to the employer's property, riotous or violent conduct, or an offence involving moral turpitude committed at work.
How the India gratuity calculator works
This calculator estimates the gratuity a private-sector employee in India can expect when leaving a job, tells you whether you meet the service condition and shows how much of the amount is free of income tax. Enter your joining date, your last working day, the kind of employment and your last basic salary plus dearness allowance. Since 21 November 2025 gratuity is governed by the Code on Social Security, 2020, which replaced the Payment of Gratuity Act, 1972 and kept the same payment formula. The result is an estimate for guidance, not legal advice.
Gratuity is 15/26 of the last drawn monthly wages (basic plus dearness allowance) for each year of service, and a final part of a year longer than six months counts as a full year. Permanent employees qualify after 5 years of continuous service; no minimum applies on death or disablement, and fixed-term employees receive pro-rata gratuity after one year. If you give your total monthly pay, the Code's 50% wage rule is applied. The statutory ceiling is ₹20 lakh. The tax-free part follows section 19 of the Income-tax Act, 2025, serial numbers 5 and 6 (old section 10(10)), in both regimes.
Example: an employee joined on 1 June 2015 and left on 15 September 2026 with basic plus DA of ₹50,000. The service is 11 years 3 months 15 days, which counts as 11 years. Gratuity is 50,000 × 15 × 11 / 26 = ₹3,17,307.69, below the ceiling and fully tax-free. Limits: the figure is an estimate; government employees follow other rules; seasonal establishments pay 7 days of wages per season; and a better contract or company policy prevails over the statutory minimum.