Payroll and employmentCalculator
Gratuity Calculator
Work out the gratuity for the years of service and the last drawn wages: 15 days of wages for each year, up to the ceiling.
Enter the wages and the years of service to see the gratuity.
How it is calculated
- Counted years = the years of service, plus one more when the months beyond them are more than 6.
- Gratuity = last drawn monthly wages × 15 ÷ 26 × counted years.
- The gratuity is never more than the ceiling of ₹20 lakh.
- Gratuity is generally payable after 5 years of continuous service.
Example. Last drawn wages of ₹52,000 and 10 years of service give ₹52,000 × 15 ÷ 26 × 10 = ₹3,00,000. With 10 years and 7 months the counted years are 11, so the gratuity is ₹3,30,000.
Rules and sources
Rules last checked on October 19, 2026
This is an illustrative calculation for general guidance, not professional advice. Rates and limits change by notification, so confirm the applicable law before you rely on a figure.
Frequently asked questions
How is gratuity calculated?
Last drawn monthly wages × 15 ÷ 26 × the years of service. The 15 is the days of wages for each year, and the 26 is the working days of a month.
How are months of service counted?
A part of a year of more than 6 months counts as a full year. Six months or less is not counted.
Who is eligible, and after how many years?
Generally after 5 years of continuous service, with exceptions such as death or disablement. Under the Code on Social Security, 2020, in force from 21 November 2025, employees on fixed-term contracts can qualify after 1 year. Confirm what applies to your case.
Which wages do I enter?
The last drawn monthly wages as defined for gratuity, traditionally basic pay and dearness allowance. Under the new labour codes the wages counted can be higher, so use the figure your payroll adviser gives you.