Gratuity is an employment-linked benefit payable when the relevant legal conditions are met. It is different from monthly salary, PF and an employer's internal CTC provision. Eligibility depends on the applicable law, service history and type of employment, so a single five-year rule does not answer every case.
Gratuity amount calculator
Enter the eligible wages and eligible years already established for your case. This is an amount estimate, not a service-eligibility decision.
Illustrative monthly-rated formula: wages × 15 ÷ 26 × eligible years. Use the correct service rounding or pro-rata basis for your employment category before entering years. A zero ceiling input produces an uncapped result. Tax exemptions, enhanced employer benefits and legal eligibility are not calculated.
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Check the current employment category
The Ministry of Labour's March 2026 FAQs discuss gratuity under the Code on Social Security and the wage definition effective from 21 November 2025. They state that qualifying direct fixed-term employees become eligible after one year under the contract. They distinguish this from contract labour engaged through a contractor. Do not label every agency worker a direct fixed-term employee.
For an ordinary resignation case, establish the continuous-service requirement and any applicable exception from the current law and payroll records. Death or disablement and fixed-term arrangements can require different treatment. Do not assume that a social-media claim about four years and 240 days settles every jurisdiction and employment situation.
Understand a calculation before using a calculator
For a standard monthly-rated example, the formula in Section 53 of the Code on Social Security, available through India Code, is eligible last-drawn monthly wages multiplied by 15, divided by 26, multiplied by eligible years of service. Confirm which wages and service period legally apply before entering numbers. A payslip label such as basic pay is not always the complete answer to the statutory wage definition.
With assumed eligible monthly wages of ₹30,000 and six eligible years, the arithmetic is ₹30,000 × 15 ÷ 26 × 6, approximately ₹1,03,846. This illustrates the calculation only; it does not establish entitlement, tax treatment, a statutory ceiling or service rounding for a particular employee. Ask payroll for those separate determinations in writing.
What to collect on exit
Keep your joining and exit records, appointment terms, service history and final wage breakup. If employment moved between group companies or a contractor and a principal employer, do not assume continuity without checking the record. Ask the employer for its calculation, wage basis, service period and applicable provisions.
The government's Code on Social Security explainer is a useful starting point, alongside the Ministry FAQs. For a disputed entitlement, obtain qualified advice or approach the competent labour authority. A gratuity amount shown within CTC is not a promise that it is paid monthly or becomes payable whenever you resign.
Prepared 1 November 2026 using the linked official sources. General education; product approval, fees, coverage and statutory entitlements depend on current terms and your circumstances. Illustrations are not personalised financial or legal advice.