Gratuity Calculator
Code on Social Security 2020 (from 21 Nov 2025) · Private, Fixed-term & Government · FY 2026-27
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Your Details
Employee Type
Private Sector Covered · 15/26
Fixed-term Eligible after 1 yr
Government CCS rules
Not Covered by gratuity law · 15/30
Last Drawn Monthly Wages (Basic + DA) ₹
Years of Service10 Years
0 Years40 Years
Plus Extra Months
Eligibility
Permanent employees need 5 continuous years (courts treat 4 years + 240 days worked in the 5th year as 5). Fixed-term employees qualify after 1 year (Code on Social Security 2020, from 21 Nov 2025). Exception: death or disablement (any tenure qualifies).
Formulas
Private / Fixed-term: Wages × 15 × Years ÷ 26 (part-year over 6 months = 1 year; max ₹20L)Government (CCS): ¼ × Emoluments × completed 6-month periods (max 16.5× emoluments, ₹25L), fully tax-free
Not covered: Average wages of last 10 months × 15 × completed Years ÷ 30
Labour Codes: “wages” must be at least 50% of total pay — excess allowances are added back.
Gratuity Amount
₹0
Based on 10 years of service
Tax-Free Limit
₹20L
Exempt u/s 10(10) (1961 Act name)
Taxable Amount
₹0
Above ₹20L limit
Gratuity Calculation
Last Drawn Salary (Basic+DA)₹0/month
Years of Service0 years
FormulaSalary × 15 × Years ÷ 26
Gratuity Amount₹0
Tax-Free Portion₹0
Taxable Portion₹0
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Frequently Asked Questions
Since 21 November 2025 gratuity is governed by the Code on Social Security, 2020 (which replaced the Payment of Gratuity Act, 1972). Permanent employees need 5 years of continuous service (not required on death or disablement). Fixed-term employees qualify after 1 year of service.
Gratuity = Last drawn wages × 15 × Years of service / 26. The "26" represents working days in a month, and "15" is the number of days' wages per year of service. A part-year of more than 6 months counts as a full year. Under the Labour Codes, if allowances excluded from "wages" exceed 50% of total pay, the excess is added back, so wages are at least 50% of CTC.
For private sector employees, gratuity up to ₹20 lakh (lifetime limit) is tax-exempt; ₹20 lakh is also the statutory payable ceiling. For government employees, the entire gratuity is tax-exempt (central government payout ceiling ₹25 lakh).
Permanent employees are not entitled to gratuity if they leave before completing 5 years of continuous service, except on death or disablement. Fixed-term employees qualify after 1 year under the Code on Social Security, 2020.
Not always. Courts have held that an employee who has completed 4 years and worked at least 240 days in the fifth year (190 days for below-ground mines or 5-day-week establishments) is treated as having 5 years of continuous service. Check with your employer.