Gratuity calculator: Earning Rs 25,000, Rs 50,000, Rs 1 lakh or Rs 1.5 lakh per month? Here's your payout after 10 years

Gratuity calculator: Gratuity, a substantial lump-sum amount, which has significantly boosts an employee's savings upon leaving a job or retiring. The amount depends on your last drawn basic salary plus dearness allowance (DA) and your eligible years of service. Under the current rules, a regular employee becomes eligible after five years of service, while fixed-term employees can claim it on a pro-rata basis.

Here’s a clear look at who qualifies for gratuity, how it is calculated using the standard formula, and the estimated amounts payable on monthly salaries of Rs 25,000, Rs 50,000, Rs 1 lakh and Rs 1.5 lakh after 10 years of eligible service.

How is gratuity calculated?

If an employee is covered under the statutory framework, the gratuity amount is calculated using these calculations.

The formula takes the employee's last drawn basic salary plus DA, multiplies(×) it by 15 days for every completed year of service, and then divides(÷) the result by 26, which is considered as the total working days in a month after excluding Sundays.

Last Drawn Salary refers to Basic Salary + Dearness Allowance (DA)

15 represents 15 days' salary for each completed year of service.

26 denotes the number of working days in a month, excluding Sundays.

Rs 25,000 salary: Gratuity calculation

For example, consider an employee whose total monthly income, comprising their final basic salary and DA (Dearness Allowance) is Rs 25,000 and who has completed 10 years of continuous eligible service.

Gratuity = (Rs 25,000 × 15 × 10) ÷ 26

Gratuity payable = Rs 1,44,231 (approximately)

Rs 50,000 salary: Gratuity calculation

For example, consider an employee whose total monthly income, comprising their final basic salary and DA (Dearness Allowance) is Rs 50,000, and who has completed 10 years of continuous eligible service.

Gratuity = (Rs 50,000 × 15 × 10) ÷ 26

Gratuity payable = Rs 2,88,462 (approximately)

Rs 1 lakh salary: Gratuity calculation

For example, consider an employee whose total monthly income, comprising their final basic salary and DA (Dearness Allowance) is Rs 1,00,00, and who has completed 10 years of continuous eligible service.

Gratuity = (Rs 1,00,000 × 15 × 10) ÷ 26

Gratuity payable = Rs 5,76,923 (approximately)

Rs 1.5 lakh salary: Gratuity calculation

For example, consider an employee whose total monthly income, comprising their final basic salary and DA (Dearness Allowance) is Rs 1,50,000, and who has completed 10 years of continuous eligible service.

Gratuity = (Rs 1,50,000 × 15 × 10) ÷ 26

Gratuity payable = Rs 8,65,385 (approximately)

Notably, this is only an estimated figure calculated as per the prescribed formula. The final gratuity amount may vary based on your actual eligible salary, total years of service, and the rules applicable.

What are the consequences of delayed gratuity payment?

The employer must calculate the gratuity and pay it within 30 days from the date it becomes due. In case of any delay, the employer may also have to pay interest for the delayed period. If you have not received your gratuity on time, you can approach the concerned authority for assistance.

What has changed since November 2025?

The Code on Social Security, 2020, along with the other three Labour Codes, came into force on November 21, 2025. As per Section 53, the end of a fixed-term contract is now clearly considered as a valid reason to be eligible for gratuity. Fixed-term employees will get gratuity on a proportionate basis. As clarified by the Ministry of Labour and Employment in March 2026, such employees are eligible after completing one year of service from the start of their contract.

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)