Gratuity, FY 2026-27
Gratuity calculator
Gratuity from your last monthly basic pay and your years of service.
How it is worked out
Gratuity is 15 days' wages for each completed year of service, worked out as 15/26 of your last monthly wages. A final part-year of more than six months counts as a full year.
₹50,000 × 15 ÷ 26 × 8 years = ₹2,30,769.
Wages here means basic pay, dearness allowance and retaining allowance, plus any allowances counted as wages because other allowances are more than half of your pay. Source: Government of India: Code on Social Security, 2020, summary.
Who gets gratuity
Under the Code on Social Security, 2020, which replaced the Payment of Gratuity Act, 1972 on 21 November 2025, gratuity is payable when you leave after at least five years of continuous service, and to fixed-term employees after one year. It is also payable on death or disablement. Many employers show gratuity inside CTC as 4.81% of basic, which is 15/26 of a month's basic for each year.
The most payable has been ₹20 lakh since the Payment of Gratuity Act ceiling was raised in 2018, so this calculator stops there. The Code on Social Security lets the government set the ceiling by notification, so check the current limit with your employer.
Gratuity can be wholly or partly free of income tax, depending on your employer and the amount. Ask your employer or a chartered accountant how it will be taxed for you.
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These figures are estimates based on the information you entered and the rules for tax year 2026-27 under the Income-tax Act 2025 as it stands after Budget 2026, EPFO notifications and state professional tax schedules. They are general information, not tax, financial or legal advice. Your actual in-hand salary can differ, for example because of your company's salary structure, variable pay, PF rules, your regime choice, TDS timing or your state. Check your payslip, or ask your payroll team or a chartered accountant, before relying on these figures.