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New Labour Code

Gratuity calculator — new Labour Code rules

Work out gratuity with the 15/26 formula, the 5-year and 1-year rules, rounding of service and the ₹20 lakh limit.

Gratuity calculator

How much gratuity will you get?

₹
years
months
Gratuity payable–
Tax-free (up to ₹20 lakh)–

How it works

  • Formula: last basic + DA × 15 × years of service ÷ 26.
  • Eligibility: 5 years of continuous service for permanent staff. Under the Labour Codes in force from 21 November 2025, fixed-term employees get gratuity after 1 year. No minimum in case of death or disablement.
  • Rounding: 6 months or more in the last year counts as a full year.
  • Limit: maximum ₹20 lakh. For private-sector employees, gratuity up to ₹20 lakh is tax-free.

Common questions

What is the gratuity formula?

Last basic + DA × 15 × years of service ÷ 26, for employers covered by the gratuity law.

Do I get gratuity before 5 years?

Under the Labour Codes in force from 21 November 2025, fixed-term employees get gratuity after 1 year. Permanent employees need 5 years, except in case of death or disablement.

How much gratuity is tax-free?

For private-sector employees, gratuity up to ₹20 lakh is tax-free.

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