Estimate the gratuity payable when you leave a job, using the standard formula for employees covered by the Payment of Gratuity Act.
For employees covered by the Payment of Gratuity Act, gratuity is calculated as: (15 × last drawn salary × years of service) ÷ 26, where salary means Basic + Dearness Allowance, and 26 represents the working days in a month. It works out to roughly 15 days' pay for every completed year of service.
Permanent employees generally qualify after 5 years of continuous service; the condition is waived on death or disablement. Under the new Labour Codes, in force since 21 November 2025, fixed-term employees qualify after 1 year. Gratuity is tax-free up to ₹20,00,000 for private-sector employees; any amount above that may be taxable. The new codes also redefine "wages", which may raise the salary used if your Basic + DA is less than half your pay, and final rules are still being notified, so treat this as an estimate.
Gratuity is tax-exempt up to ₹20,00,000. Any amount received above that limit may be taxable depending on your situation.
Permanent employees generally qualify after 5 continuous years with the same employer, and this is waived on death or disablement. Fixed-term employees qualify after 1 year under the Labour Codes in force since 21 November 2025.
Read the guide: Gratuity explained: formula, eligibility and tax →
Last updated: August 2026. Estimate only; exact gratuity depends on your employer and the applicable rules.