Gratuity is one of the most important financial benefits for employees in India. This page gives you a complete, updated and easy way to calculate your gratuity instantly, along with the latest rules and practical guidance for 2025.
- Select your employment type - Permanent OR Contract
- Enter Monthly Basic & DA, Date of Joining and Date of Exit and Click to Calculate.
Gratuity Calculator India Payment of Gratuity Act, 1972
| Components | Values |
|---|---|
Date of Joining*: |
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Date of Exit*: |
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Basic & DA (P.M.)*: |
₹
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Gratuity Formula: (Basic Salary ÷ 26) × 15 × Number of Completed Years
Permanent: Minimum 5 years service required
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Disclaimer: This calculator provides an estimate based on current rules. Actual gratuity may vary depending on employer policy, wage structure and official verification.
Understanding Your Results
Once you calculate, you’ll see:
- Whether you are eligible for gratuity
- The exact gratuity amount based on your completed years of service
- A clear breakdown of the formula used
- Key components such as daily wage, 15-day wage and total service duration
This section helps you quickly understand how the final amount was computed so you don’t have to decode the formula yourself.
What is the Online Gratuity Calculator India?
The Online Gratuity Calculator India is a free tool that estimates the amount an employee is entitled to receive under the Payment of Gratuity Act, 1972. It follows the current rules, including the 15-day wage formula and eligibility conditions for permanent and contract employees.
The calculator is designed for Indian workers who want quick and reliable results without dealing with manual calculations.
Why & Who Need This Calculator
People across different job roles use this calculator because gratuity rules can sometimes feel complicated. This tool helps:
- Employees planning a job switch or retirement
- HR professionals preparing final settlement estimates
- Employers cross-checking internal payroll calculations
- Contract workers confirming if they meet the revised eligibility norms
- Anyone trying to understand how gratuity works under Indian labour laws
It removes guesswork and gives you a simple, clear figure you can rely on.
How to Use the Online Gratuity Calculator India (Step-by-Step)
- Select employee type — Permanent or Contract
- Enter your Date of Joining
- Enter your Date of Exit
- Enter your Basic Salary per month
- Click Calculate Gratuity
- Your eligibility, breakdown and final gratuity amount appear instantly
If you want to start fresh, use Reset to load default values.
Key Features of the Online Gratuity Calculator India
- Updated as per the latest rules and wage definitions
- Separate eligibility logic for permanent and contract employees
- Instant calculation with detailed component-wise breakdown
- Indian currency formatting for better readability
- Pre-filled sample values to help first-time users
- Mobile-friendly layout for fast access
- Designed for evergreen usage and long-term accuracy
Benefits of Using This Online Gratuity Calculator India
Using this calculator saves time and avoids errors that often happen when people try to apply the 15-day wage formula manually. Here’s why most users prefer it:
- Instant results without spreadsheets or manual math
- Accurate calculations aligned with the Payment of Gratuity Act, 1972
- Clear eligibility checks so you know whether you qualify before estimating
- Easy for HR teams who handle multiple employee settlements
- Simple layout that works smoothly on mobile and desktop
- Helps with financial planning, especially for retirement or job change
- Compliant with the latest labour code updates, so you don’t rely on outdated rules
Whether you’re an employee or employer, this tool ensures you get a reliable estimate every time.
Rules, Policies & Latest Updates (as of Nov 2025)
Gratuity in India is governed primarily by the Payment of Gratuity Act, 1972. Here are the key rules every employee should know:
1. Eligibility Conditions
- Permanent employees must complete at least 5 years of continuous service.
- For contract employees, the new labour code allows gratuity eligibility after 1 year of service, but only for those who joined on or after 21 November 2025.
- Eligibility also applies in cases of death or disability regardless of service length.
2. Components Considered
Gratuity is calculated based on:
- Basic Salary (mandatory)
- Dearness Allowance (if applicable)
Other allowances like HRA or incentives are not included.
3. Calculation Basis
Gratuity uses the 15 days’ wage formula, where monthly salary is divided by 26 to derive the daily wage.
4. Maximum Limit
Under the latest notifications, the maximum tax-free gratuity limit is maintained at ₹20,00,000 for private-sector employees.
5. Continuous Service Rule
Even if you take casual, medical or maternity leave, it still counts toward continuous service.
6. Compliance & Source Validation
Gratuity rules stem from central legislation and government guidance. Updates are typically published on the Ministry of Labour & Employment website and the EPFO portal, both of which you can refer to for cross-verification.
Recent Changes & Updates in Gratuity Rules (2025)
The gratuity framework in India has been updated to make the benefit more inclusive and transparent. The table below summarises the key changes applicable as of November 2025.
| Update | What Changed |
|---|---|
| Eligibility for Fixed-Term / Contract Employees | Contract and fixed-term employees can now qualify for gratuity after 1 year of continuous service (earlier 5 years). This applies to workers appointed under fixed-term arrangements. |
| Revised Definition of “Wages” | At least 50% of total CTC must be treated as “wages” for calculating gratuity and other social-security benefits. If allowances cross 50%, the excess must be added back to wages. This may increase the gratuity amount for many employees. |
| Broader Coverage under Labour Code | More categories — including fixed-term, contract, and certain emerging sectors — are now covered under the social security framework. This expands gratuity eligibility across industries. |
| Employer Compliance Requirements | Employers must update salary structures, re-evaluate gratuity calculations using the new wage definition, and ensure accurate eligibility checks based on revised norms. |
| Focus on Transparency & Worker Protection | The updates aim to simplify rules, improve transparency, and ensure contract and project-based workers also receive fair end-of-service benefits. |
How Is the Online Gratuity Calculator India Amount Computed?
The calculation follows a simple statutory formula:
Gratuity = (Basic Salary ÷ 26) × 15 × Completed Years of Service
Here’s what each part means:
- Basic Salary ÷ 26 → Finds the daily wage
- Daily Wage × 15 → Calculates the value of 15 days of pay
- Multiply by Completed Years → Gives the final gratuity amount
The calculator also checks:
- Whether your service duration meets eligibility
- If your joining date affects contract employee rules
- Proper rounding for Indian currency
This ensures your result aligns with real-world HR calculations.
Example Calculation with Breakdown Table
Let’s look at a simple example to make things clear.
Sample Inputs
- Basic Salary: ₹35,000
- Date of Joining: 10 Aug 2018
- Date of Exit: 10 Aug 2025
- Completed Years: 7 years
Step-by-Step Calculation
| Component | Value |
|---|---|
| Monthly Basic Salary | ₹35,000 |
| Daily Wage = 35,000 ÷ 26 | ₹1,346.15 |
| 15 Days’ Wage = Daily Wage × 15 | ₹20,192.30 |
| Completed Years | 7 |
| Final Gratuity = 20,192.30 × 7 | ₹1,41,346.10 |
This is the same method used by HR teams and payroll systems across India, which is why the calculator’s results match industry standards.
Common Mistakes to Avoid When Using the Online Gratuity Calculator India
Many users make small errors that lead to incorrect results. Watch out for these:
1. Entering Gross Salary Instead of Basic Salary
Gratuity is never calculated on gross pay. Only Basic Salary + DA (if applicable) are used.
2. Choosing the Wrong Employee Type
Eligibility rules differ for permanent and contract employees. Selecting the wrong option changes the final result.
3. Using an Exit Date Before the Join Date
This breaks the formula and gives an invalid service duration.
4. Counting Partial Years Incorrectly
Gratuity considers only completed years. The calculator handles this automatically, so avoid estimating manually.
5. Forgetting the Latest Labour Rule Updates
The 1-year eligibility for contract staff applies only if they joined after 21 November 2025. Many users miss this detail.
6. Assuming All Employers Use the Same Method
Some organisations offer better gratuity as part of internal policy. The statutory formula remains the baseline.
Being aware of these mistakes ensures your calculation remains accurate and aligned with official rules.
Additional Tips for Maximising Your Gratuity Payout
Even though gratuity follows a fixed law, a few practical steps can help you stay prepared and avoid surprises at the time of exit.
1. Keep Your Salary Structure Clear
Make sure your Basic Salary is correctly defined in your payslips. Any misclassification can affect your gratuity calculation.
2. Maintain a Record of Your Service
Many employees depend entirely on HR records. Keeping your own record of joining dates, transfers and leaves ensures there are no errors during final settlement.
3. Understand Your Company’s Internal Policy
Some organisations offer better gratuity than the statutory minimum. Ask HR if your company has its own enhanced formula.
4. Track Labour Code Updates
Labour rules evolve. Keeping an eye on new notifications helps you know if eligibility or calculation rules change in the future.
Government sources publish updates periodically, and these are considered the most reliable for cross-checking.
Why This Calculator Is an Evergreen Resource
Most calculators available online become outdated because they don’t adapt to new wage definitions, labour code changes or updated tax limits.
This Online Gratuity Calculator India is designed to stay current with:
- Annual wage revisions
- Future labour code implementations
- Updated tax exemption limits
- Enhancements in eligibility norms for contract workers
- Changes in the definition of “wages”
This makes the tool a long-term, reliable reference for Indian employees and HR professionals.
Editor’s Note
Last Updated: December 2025
This page reflects the rules and industry practices applicable as of the current financial year.
The content is based on verified public resources, including official labour legislation and guidance issued by government bodies.
For ongoing notifications related to gratuity and employee benefits, government portals remain the most authoritative sources.
Gratuity is a financial benefit that many employees underestimate until the time of exit. Having a simple and accurate tool like the Online Gratuity Calculator India makes it easier to plan your finances, verify your HR settlement, and understand your rights as an employee.
Whether you are leaving a job, preparing to retire or simply checking your eligibility, this calculator gives you clarity in just a few seconds.
Bookmark this page and revisit it whenever you need an updated estimate.
Conclusion
The Online Gratuity Calculator India makes it easier for employees and HR professionals to estimate gratuity accurately. With updated rules, clear eligibility checks and a simple interface, the tool removes confusion from the final settlement process.
Whether you’re planning a job switch, retirement or simply want to understand your benefits under the Payment of Gratuity Act, this calculator gives you reliable results within seconds.
Keep this page bookmarked so you can revisit it anytime the rules change or whenever you need a quick calculation.
FAQ
How is gratuity calculated in India?
Gratuity is calculated using the formula: (Basic Salary ÷ 26) × 15 × Completed Years of Service. This is the official method under the Payment of Gratuity Act, 1972.
Who is eligible for gratuity?
Permanent employees need at least 5 years of continuous service. Contract or fixed-term employees can become eligible after 1 year of service, depending on appointment terms and updated labour rules.
Is gratuity taxable in India?
Yes, gratuity is tax-free up to ₹20 lakh for private sector employees. Any amount beyond the exemption limit is taxable as per income tax rules.
Does leave without pay break my gratuity eligibility?
No. Paid leave, maternity leave, sick leave and leave without pay do not break continuous service under the Act.
Can I get gratuity before completing 5 years?
Yes. In cases of death or permanent disability, the five-year requirement is waived and gratuity becomes payable immediately.
What salary should I enter in the gratuity calculator?
Enter your Basic Salary. If your salary structure includes DA, add it as well. Do not include HRA, incentives or variable pay.
Do employers use the same formula for gratuity?
Yes, the statutory formula remains the same. However, some companies offer better gratuity under their internal policies, resulting in a higher payout.
Is the Online Gratuity Calculator India accurate?
Yes. The calculator follows the official formula, updated rules, and eligibility criteria based on the Payment of Gratuity Act and current labour guidelines.