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Gratuity Calculator
Result
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Show formula & working
Covered: 15 ÷ 26 × last monthly wages × years of service (6 months or more rounds up)
Not covered: 15 ÷ 30 × average salary of the last 10 months × completed years · Ceiling ₹20 lakh
Details
Gratuity: rates and rules as of 31-Oct-2026 · Source: Code on Social Security, 2020 (s. 53) — Ministry of Labour FAQs on the Labour Codes (ceiling ₹20 lakh as notified; fixed-term employees after one year; wages ≥ 50% of remuneration); 15/26 formula as under the Payment of Gratuity Act. Every figure based on it stays editable.
How this works
Gratuity rewards long service. Permanent employees qualify after five years (earlier on death or disablement); under the Code on Social Security, fixed-term employees qualify after one year, proportionately.
The tax-exempt portion is the least of the amount received, the formula amount and the exemption limit.
Frequently asked questions
Why 26?
The law treats a month as 26 working days.
Does the ceiling apply to the tax exemption too?
The tax exemption has its own limit, currently set at the same ₹20 lakh; it will be re-checked with the tax rules.