{"slug":"india-gratuity","name":"India Gratuity Calculator (Labour Codes, from 21 Nov 2025)","category":"earn","tags":["income","employment","planning"],"region":"IN","tagline":"Statutory gratuity under the new Labour Codes — the 50% wage floor and the 1-year fixed-term gate that the old answer misses.","endpoint":"https://xearno.tools/api/v1/tools/india-gratuity","page":"https://xearno.tools/t/india-gratuity","description":"Computes statutory gratuity under India’s Code on Social Security 2020, in force since 21 Nov 2025 (general AI often still says the Labour Codes are pending). The formula looks unchanged — wages × 15/26 per year of service — but two decisive inputs are hidden: the §2(88) wage definition floors the gratuity base at 50% of total remuneration when basic + DA is kept low (most modern salary structures), and fixed-term employees now qualify after just 1 year instead of 5. Both can turn the “obvious” answer from wrong to right by lakhs.","inputSchema":{"type":"object","properties":{"employmentType":{"description":"What kind of employment? This gate is the headline change — fixed-term employees now qualify after just 1 year (pro-rata), and working journalists after 3. Under the old Act the answer for a 2-year fixed-term worker was simply ₹0.","type":"string","enum":["permanent","fixed-term","journalist"],"default":"permanent"},"basicDA":{"description":"Monthly basic + DA last drawn Basic pay + dearness allowance (+ retaining allowance, if any) in your last drawn month. Gratuity runs on last-drawn wages, not an average.","type":"number","minimum":0,"default":25000},"totalRemuneration":{"description":"Total monthly remuneration Everything monthly: basic, DA, HRA, allowances, employer PF contribution, statutory bonus — but not gratuity or ESI (per the MoLE FAQ). The 50% floor: if basic + DA is under half of this, the law adds the excess back. THIS is what most people don’t know.","type":"number","minimum":0,"default":60000},"serviceYears":{"description":"Completed years of service Whole completed years of continuous service. Put the leftover months in the next field.","type":"number","minimum":0,"maximum":60,"default":10},"serviceExtraMonths":{"description":"…plus months Months beyond the completed years. More than 6 months rounds UP to a full extra year (§53(2)); exactly 6 does not.","type":"number","minimum":0,"maximum":11,"default":0},"exitReason":{"description":"Why is employment ending? Death or disablement waives the qualifying-service requirement entirely; the formula is otherwise the same.","type":"string","enum":["service","death-disablement"],"default":"service"}},"required":[],"additionalProperties":false},"methodology":["In force: the entire gratuity chapter (Code on Social Security 2020, §§53–58) took effect on 21 Nov 2025. Per the MoLE FAQ (16 Mar 2026), exits on or after that date are computed entirely under the Code on last-drawn wages — no splitting of service between old and new law. Implementing rules are still being finalised, but they are procedural; the substantive numbers here come from the Act itself.","Formula (unchanged from the 1972 Act): gratuity = monthly wages × 15/26 × qualifying years. Qualifying years = completed years of continuous service, plus one if the part-year beyond them is in excess of six months (§53(2)) — exactly 6 months does NOT round up. The 15/26 is statutory (15 days’ wages on a 26-working-day month); dividing by 30 is a common error.","Wages (§2(88) — the new mechanic): wages = basic + dearness allowance + retaining allowance. But if the excluded components (a)–(i) — HRA, conveyance, overtime, commission, statutory bonus, employer PF contribution, etc. — exceed 50% of total remuneration, the excess is added back into wages. Practical effect: gratuity wage = max(basic + DA, 50% of total remuneration). Total remuneration includes the employer PF contribution and statutory bonus but excludes gratuity and ESI (MoLE FAQ); annual performance incentives are not remuneration (MoLE FAQ 4). Remuneration in kind counts toward wages up to 15%.","Eligibility: permanent employees need 5 completed years of continuous service; fixed-term employees qualify after 1 year from the contract start, pro-rata (under 1 year is not eligible — MoLE FAQ 14/19); working journalists need 3 years; death or disablement has no minimum. The Code’s continuous-service definition deems 240 working days in a year as a year of service. Courts under the 1972 Act read 4 years + 240 days as satisfying the 5-year rule; whether that gloss survives under the Code is unresolved, so this tool keeps eligibility strict at the completed-year thresholds and applies the >6-month round-up only to payout years once eligible.","Ceiling: ₹20,00,000, carried forward from the notification under the 1972 Act pending a fresh notification under §53(3) — it may be raised. The income-tax exemption for non-government employees is also ₹20 lakh, as a lifetime limit (Income-tax Act §10(10)(iii)). Government employees are outside this chapter entirely (their gratuity follows service rules and is fully exempt).","This is the statutory floor: an award, contract, or employer scheme with better terms prevails over it."],"usage":"POST https://xearno.tools/api/v1/tools/india-gratuity with a JSON body matching inputSchema."}