Gratuity Calculator India
Calculate your exact gratuity based on the Payment of Gratuity Act, 1972. Supports both covered and non-covered employees. Updated for 2026.
Employment Details
Fixed-term employees become eligible after 1 year under 2025-26 labor rules.
Most organized sector companies with 10+ employees are covered (divisor 26).
Enter exact or fractional years (e.g. 5.6 for 5 years 7 months)
Results & Statutory Breakdown
Enter your employment details and click Calculate to view statutory payout, tax exemptions, and legal rights.
Exiting Your Job? Review All Dues & Exit Clauses
Scan your employment agreement for restrictive non-competes, notice buyout traps, and full settlement rights.
Gratuity Rules 2026: The Complete Guide
1. Mandatory Eligibility: The 5-Year Rule
Generally, an employee must complete 5 years of continuous service with the same employer to be eligible for gratuity. However, there are significant legal nuances:
The 4 Years & 240 Days Rule: Courts in India have frequently ruled that completing 240 days in the 5th year counts as a full year of service. Effectively, you may be eligible after 4 years and ~8 months.
2. Social Security Code 2025: Major 2026 Update
With the full implementation of the Social Security Code in 2025-26, the 5-year barrier is breaking down for several categories:
- Fixed-Term Employees: Contractual workers are now eligible for gratuity after just 1 year of service on a pro-rata basis.
- Working Journalists: Eligibility starts after 3 years.
- Death or Disability: The service duration rule is completely waived if employment is terminated due to death or permanent disability.
3. "Covered" vs "Not Covered" Establishments
Your gratuity amount depends on whether your employer is covered under the 1972 Act (establishments with 10+ employees):
Covered Under Act
Divisor is 26. Years are rounded (e.g., 5.6 yrs = 6 yrs). Formula results in a higher payout.
Not Covered
Divisor is 30. Only completed years are counted (e.g., 5.9 yrs = 5 yrs). Lower payout.
4. Tax Exemption & Form I
Gratuity is tax-free up to ₹20 Lakhs for private employees. To claim your gratuity, you should submit Form I to your employer within 30 days of leaving.
How to Ensure You Get Your Gratuity
Check Tenure
Verify your exact joining and exit dates. Remember the notice period counts towards your service tenure.
Basic + DA
Calculate your 'Last Drawn Salary' by adding only Basic Pay and Dearness Allowance. HRA and other allowances are usually excluded.
Submit Form I
Submit a formal application for gratuity (Form I) to your HR department immediately upon resignation or retirement.
Employer's Duty
The employer must pay within 30 days of the date it becomes payable. If they delay, you are entitled to simple interest on the amount.
Nomination (Form F)
Ensure you have submitted Form F to your employer to nominate someone who will receive the gratuity in case of an unfortunate event.
Social Security Code
If you are a contract worker, check if your tenure exceeds 1 year. The new laws protect your pro-rata gratuity rights.