How much gratuity will I get on my salary in 2026?

Your gratuity cannot be calculated from gross salary alone. For a monthly-rated employee, the usual statutory estimate is last drawn monthly wages × 15 ÷ 26 × qualifying years of service. The wage figure on your payslip and your completed service therefore matter more than the headline salary or CTC. This guide shows illustrative gratuity amounts for salaries of ₹30,000, ₹50,000 and ₹1 lakh.

Each table assumes statutory wages equal to 50% of the stated monthly salary only for illustration. Your actual amount can differ because the legal definition of wages applies to your remuneration structure.

How is gratuity calculated from monthly salary?

For a monthly-rated employee, gratuity is generally calculated at 15 days’ wages for every completed year of service, including a part-year exceeding six months. The standard estimate is:

Gratuity = Last drawn monthly wages × 15 ÷ 26 × qualifying years of service

The divisor 26 converts monthly wages into a daily rate for this statutory calculation. “Last drawn monthly wages” is not automatically your gross salary or CTC. Under the current wage framework, specified components are included or excluded, and an add-back can apply when excluded allowances exceed the permitted proportion of total remuneration. Check the wage figure used by payroll rather than assuming basic pay is always exactly half of CTC.

Example: If last drawn monthly wages are ₹25,000 and qualifying service is 10 years, the estimate is ₹25,000 × 15 ÷ 26 × 10 = ₹1,44,231, rounded to the nearest rupee.

How much gratuity may I get on a ₹30,000 monthly salary?

If monthly salary is ₹30,000 and statutory wages are assumed to be ₹15,000, estimated gratuity ranges from ₹43,269 after 5 qualifying years to ₹1,73,077 after 20 years. This is an illustration, not a declaration that every ₹30,000 salary has ₹15,000 of statutory wages.

How much gratuity may I get on a ₹50,000 monthly salary?

If monthly salary is ₹50,000 and statutory wages are assumed to be ₹25,000, estimated gratuity is ₹72,115 after 5 qualifying years and ₹4,32,692 after 30 years. Use your actual last drawn statutory wages for a personalised estimate.

How much gratuity may I get on a ₹1 lakh monthly salary?

If monthly salary is ₹1 lakh and statutory wages are assumed to be ₹50,000, estimated gratuity is ₹1,44,231 after 5 qualifying years and ₹10,09,615 after 35 years. The statutory payment ceiling may limit a higher formula result, unless the employer provides better gratuity terms.

Which salary components count as wages for gratuity?

Use the statutory definition of wages in force on the date gratuity becomes payable. Basic pay and dearness allowance are central components, but the current definition also regulates exclusions and may add back part of excluded allowances when they cross the prescribed threshold. Employer contributions to pension or provident fund are excluded.

This is why two employees with the same gross salary can receive different gratuity amounts. Before relying on an online calculator, identify the last drawn wage figure that payroll will use and ask for the component-wise basis in writing.

Who is eligible to receive gratuity?

Gratuity is generally payable when employment ends after at least five years of continuous service due to superannuation, retirement, resignation, or another qualifying termination. The five-year condition does not apply when employment ends because of death or disablement. In a death case, payment goes to the nominee or legal heir as applicable.

For fixed-term employment, the labour-code framework provides a specific exception on expiry of the fixed term and calculates gratuity on a pro-rata basis. Do not read this as a universal one-year entitlement after every resignation or termination. The employment contract, reason for separation, and provisions in force should be checked.

How is a partial year of service rounded?

A service period beyond a completed year is generally rounded up only when the remaining period exceeds six months. For example, 7 years and 7 months is treated as 8 years for the formula, while 7 years and 5 months is treated as 7 years. Payroll should verify continuous service under the applicable rules.

Is there a maximum gratuity amount?

The notified ceiling for statutory gratuity payable to covered non-government employees is ₹20 lakh. The ceiling limits the employer’s statutory liability, but an award, agreement, contract, or employer policy may provide more favourable gratuity terms. Tax treatment of any amount above the applicable exemption is a separate question.

Is gratuity tax-free?

Not automatically in every case. Exemption depends on whether you are a government employee, covered by gratuity law or outside its coverage, as well as the amount received, the statutory formula, salary history, and the aggregate lifetime ceiling under the applicable income-tax law. Any excess may be taxable. Because tax provisions changed from 1 April 2026 under the Income Tax Act, 2025, confirm the corresponding provisions and your personal facts with a qualified tax professional before filing a return.

The amount exempt from tax and the amount payable by an employer should not be treated as interchangeable.

How can I check my gratuity estimate before leaving a job?

Start with your latest payslip, date of joining, proposed last working day, and employment type. Ask payroll to identify the statutory wage figure, continuous-service period, rounding method, and any employer policy that is more favourable than the statutory minimum. Then compare the written calculation with the formula in this guide.

If the amount appears incorrect, raise the discrepancy with HR or payroll and retain payslips, appointment letters, service records, and separation documents. Where the issue remains unresolved, contact the appropriate labour authority, or obtain independent legal advice. A calculator provides an estimate. It does not decide entitlement.

What should I do with gratuity in retirement planning?

Treat gratuity as one component of retirement resources, not as a substitute for a complete plan. Estimate the net amount after any tax, then map it to essential expenses, emergency liquidity, and long-term income needs. Product choices, if any, should follow a needs assessment, risk review, and reading of the relevant policy documents.

Also read

• How to claim gratuity after leaving a job?
• What happens to gratuity after resignation or termination?
• How to save tax on gratuity legally?
• Can you lose gratuity?

References

• Code on Social Security, 2020, Chapter V and related provisions: https://www.indiacode.nic.in/bitstream/123456789/16823/1/a2020-36.pdf
• Code on Wages, 2019, definition of wages: https://www.indiacode.nic.in/bitstream/123456789/15793/1/a2019-29.pdf
• Ministry of Labour and Employment, implementation and rules under the labour codes: https://labour.gov.in/
• Press Information Bureau, notification raising the gratuity ceiling to ₹20 lakh: https://www.pib.gov.in/newsite/PrintRelease.aspx?relid=189273
• Income Tax Department, applicable gratuity exemption guidance and the Income-tax Act, 2025: https://www.incometax.gov.in/