Gratuity Calculator
Estimate your gratuity with the 15/26 formula under the new labour codes, including the one-year rule for fixed-term employees and the ₹20 lakh tax-free limit.
How this calculator works
Gratuity = last drawn monthly wage × 15 ÷ 26 × years of service. The wage is basic pay plus dearness allowance; 15/26 represents 15 days’ wages for each year, counting 26 working days a month. A final part-year of more than six months counts as a full year. Permanent employees generally qualify after 5 years; courts have accepted 4 years plus 240 days worked (about 8 months) as 5 years, so the calculator treats 4 years 8 months as eligible. Treat the result as indicative.
The labour codes in force from 21 November 2025 keep the 5-year rule for permanent employees but make fixed-term employees eligible after 1 year, and require at least 50% of total pay to count as wages, which raises the gratuity base for many people. Gratuity is capped at ₹20 lakh, and for non-government employees up to ₹20 lakh over a lifetime is tax-free.
Worked example: ₹60,000 basic + DA, 7 years 8 months
| Item | Amount |
|---|---|
| Years counted (8 months rounds up) | 8 |
| Gratuity = 60,000 × 15/26 × 8 | ₹2,76,923 |
| Tax-free (under ₹20 lakh) | ₹2,76,923 |
Sources & data
Figures checked on November 3, 2026.
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Frequently Asked Questions
After how many years do I get gratuity?
Five years of continuous service for permanent employees, and one year for fixed-term employees under the labour codes in force since 21 November 2025. The 5-year rule does not apply on death or disablement.
How is gratuity calculated?
Last drawn basic plus DA × 15/26 × completed years of service, with a final part-year of more than six months counted as a full year.
Is gratuity taxable?
For non-government employees, gratuity up to ₹20 lakh over a lifetime is tax-free; anything above is taxed at your slab rate. Government employees’ gratuity is fully exempt.
What is the maximum gratuity?
The statutory gratuity is capped at ₹20 lakh. Employers can pay more, but the extra is taxable.