Gratuity calculator
The form opens on the Ministry of Labour's wage example: remuneration of ₹76,000, wages of ₹22,000, and ten years of monthly-rated service. Gratuity on that example is ₹1,26,923.
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Rules checked on 27 October 2026: Code on Social Security, 2020, sections 2(88) and 53, in force from 21 November 2025; Ministry of Labour and Employment FAQs of 30 December 2025 and 16 March 2026.
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How to use it
- Choose monthly, seasonal or piece-rated wages, and why the employment ended.
- Enter the last-drawn basic pay, dearness allowance, retaining allowance and the allowances in the 50% test.
- Read the gratuity, the wages the formula used, and the service it counted.
How statutory gratuity is worked out
Section 53 pays fifteen days' wages for every completed year, and for a part of a year above six months. For monthly-rated wages, fifteen days means the monthly wages divided by 26, then multiplied by 15. A seasonal establishment uses seven days' wages for each completed season. Piece-rated wages are the average daily wage of the three months before the employment ended, leaving overtime out. Fixed-term employment, death and disablement count the months in proportion.
Wages are basic pay, dearness allowance and retaining allowance. When the allowances listed in section 2(88) are more than half of all remuneration, the excess is added. Gratuity and retrenchment compensation count in all remuneration. The 50% comparison uses the other allowances. The statutory ceiling is the notified ₹20 lakh. A contract, award or agreement can provide more. An exit on or after 21 November 2025 uses the wages last drawn.
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Questions
When does a fixed-term employee qualify?
A fixed-term employee qualifies once the contract has run for one year from the start. One year and three months counts as 1.25 years. A contract that has reached eleven months qualifies when it completes the year.
Who qualifies after a shorter period?
Death, disablement and the end of a fixed-term contract qualify with the service completed. A working journalist qualifies after three years. Other employees qualify after five years of continuous service.
What is the ₹22,000 wage in the example?
Basic pay and dearness allowance are ₹20,000. Allowances in the 50% test are ₹40,000. Gratuity and retrenchment compensation of ₹16,000 make the remuneration ₹76,000. Half of that is ₹38,000, so ₹2,000 is added back and the wages are ₹22,000.
Does six extra months add a year?
A part of a year above six months counts as another year. Six months stays with the completed years. Fixed-term employment, death and disablement use the months in proportion, so six months there is half a year.
What can reduce the amount after this formula?
Section 53(6) allows forfeiture for damage, violence, or an offence of moral turpitude in the course of employment. This page shows the formula amount. The ₹20 lakh ceiling applies while the ceiling box is ticked, and a better contract still stands.