Gratuity Calculator under the Code on Social Security, 2020
Check whether gratuity is due, work out the amount and the pay-by date, and get a letter to send.
- Free to use
- Runs in your browser
- No sign-up
Making the final salary slip? Use the Salary Slip Generator. To count the working days in the last month, try the Working Days Calculator.
Want an expert to check this result?
Send it to us in one click. We read it and reply within one business day with what we would fix first.
Embed this tool on your websiteFree. Paste one code; it runs in your visitors' browsers.
Copy this code into a page of your site. The tool sets no cookies and sends nothing your visitors type to us. Change height="760" if it needs more room.
About the Gratuity Calculator
Type the joining date, the last working day, the last drawn wages and why the job ended. You get whether gratuity is due, the years counted, the amount with the formula shown (15 days' wages for each year: monthly wages ÷ 26 × 15), the ceiling applied if needed, the date it should be paid by, interest if it is paid late, and a letter: a request from the employee or the employer's notice of the amount. It follows the Code on Social Security, 2020 and runs in your browser.
How it works
-
Step 1
Choose whether you are the employee or the employer, the type of employment and why the job ended, then type the joining date and the last working day.
-
Step 2
Type the last drawn basic pay, DA and all other pay. The tool applies the labour codes' 50% rule to find the wages, or you can choose basic pay and DA only.
-
Step 3
Read the eligibility, the amount and the pay-by date, add a payment date to check for interest, then copy or download the letter.
Who gets gratuity under the labour code
The Code on Social Security, 2020, in force from 21 November 2025, makes gratuity payable when a job ends after at least five years of continuous service: on retirement or superannuation, resignation, death or disablement due to accident or disease, or the end of a fixed-term contract. Five years are not needed on death or disablement. The Labour Ministry's FAQs say a fixed-term employee becomes eligible after one year of service under the contract, and the Code says fixed-term and deceased employees are paid on a pro rata basis. On death, gratuity goes to the nominee, or to the heirs if no one was nominated. Continuous service includes time off for sickness, accident or leave.
How the amount is worked out
Section 53 gives 15 days' wages for each completed year of service, and a part year of more than six months counts as a full year. For a monthly-paid employee, 15 days' wages are the last monthly wages ÷ 26 × 15. In a seasonal establishment, an employee who was not employed all year gets seven days' wages for each season. The total cannot go above the ceiling the Central Government notifies, which the Labour Ministry's FAQs give as ₹20 lakh. From 21 November 2025, wages follow the labour codes' definition: basic pay, DA and retaining allowance, plus any part of other pay above half of total pay. The employer must pay within 30 days of the gratuity becoming payable, or pay simple interest from that date.
What this tool cannot do
It works on the dates and wages you type. It cannot tell whether your establishment is covered, it does not handle piece-rated wages, breaks in service or a company scheme that pays more, and it does not split service before and after 21 November 2025. The Code does not spell out how "pro rata" is counted, so for fixed-term and deceased employees the tool shows the section 53 formula and, beside it, an exact count as our reading. It does not work out income tax: under the Income-tax Act, 2025, in force from 1 April 2026, section 19 deals with the tax-free part, so ask your CA. It is not legal or tax advice.
Frequently asked questions
How is gratuity calculated under the new labour code?
Gratuity is 15 days' wages for each completed year of service, plus one more year when the part year is more than six months. For monthly pay, divide the last monthly wages by 26, multiply by 15, then by the years counted. For example, wages of ₹19,000 a month and 6 years and 7 months of service give ₹19,000 × 15 ÷ 26 × 7 = ₹76,731.
Can I get gratuity before five years?
In some cases, yes. Under the Code on Social Security, 2020, five years are not needed when the job ends because of death or disablement due to accident or disease. A fixed-term employee becomes eligible after one year of service under the contract, according to the Labour Ministry's FAQs. A permanent employee who resigns or retires needs five years of continuous service.
Which wages are used for gratuity?
The rate of wages last drawn. From 21 November 2025 the Labour Ministry says gratuity uses the labour codes' definition of wages: basic pay, dearness allowance and retaining allowance, and when other allowances come to more than half of total pay, the amount above half is added. The tool shows its estimate of this, and you can choose basic pay and DA only.
How soon must the employer pay gratuity?
Within 30 days of the date it becomes payable. If the employer pays later, it owes simple interest from that date to the date it pays, at a rate no higher than the one the Central Government notifies for repaying long-term deposits. The employer must also work out the amount and give written notice of it to the person and to the competent authority, even if no one has applied. If the amount is disputed, either side can go to the competent authority under the Code.
What is the most gratuity can be, and is it taxed?
The Code caps gratuity at an amount the Central Government notifies; the Labour Ministry's FAQs give it as ₹20 lakh. Part or all of it can be tax free: under the Income-tax Act, 2025, which applies from 1 April 2026, section 19 sets the tax-free part, which depends on the kind of employer and a limit the government notifies. This tool does not work out tax, so ask your CA.
Related reading
Rather have us do it for you?
Tell us about your business and what you want to fix. We reply within one business day.
Talk to usMore free tools
All tools- Discount & Offer Profit Calculator How many more sales a discount, BOGO or free gift needs to earn the same gross profit.
- LTV & CAC Calculator Customer lifetime value, the cost to win a customer, the LTV:CAC ratio and payback in months.
- Marketing Budget Planner Turn a sales goal into leads and a monthly budget by channel, with GST and a 12-month plan.
- UPI Payment QR & Link Generator Turn your UPI ID into a payment QR code, a link to copy and a printable counter card.
Want us to fix what the tool found?
Tell us about your business and what you want to grow. We reply within one business day with next steps, not a sales script.
- A reply within one business day
- A quick look at your site and search visibility before we talk
- Your details are only used to answer your enquiry