Are the Labour Codes actually in force?

Yes — the gratuity chapter of the Code on Social Security 2020 (§§53–58) took effect on 21 Nov 2025, and the Ministry of Labour’s FAQ (16 Mar 2026) confirms exits on or after that date are computed entirely under the Code. General AI often still answers that the Codes are pending — they trained on years of “notified but not in force” coverage. Only the implementing rules (procedural) are still being finalised.

Is gratuity still calculated on basic + DA?

Only if your basic + DA is at least half your total remuneration. The Code’s wage definition (§2(88)) adds excluded allowances back whenever they exceed 50% of total remuneration — so the gratuity wage is effectively the higher of basic + DA and 50% of your total remuneration (which includes the employer PF contribution and statutory bonus). Modern salary structures that keep basic low are exactly the ones this floor catches.

Do fixed-term employees get gratuity?

Yes — this is one of the Code’s headline changes. A fixed-term employee qualifies after just 1 year of the contract (pro-rata), where the old Act required 5 years. Under 1 year remains ineligible. Working journalists qualify at 3 years, and death or disablement has no minimum at all.

For non-government employees, gratuity is exempt from income tax up to ₹20 lakh — a lifetime limit across all employers (§10(10)(iii)), matching the statutory ceiling. Anything received beyond the exempt amount is taxed as salary. Government employees’ gratuity is fully exempt.

I have 4 years and 8 months — do I qualify?

Strictly, no: the qualifying service for a permanent employee is 5 completed years, and the >6-month round-up applies only to the payout calculation once you already qualify. But courts under the old Act treated 4 years + 240 days worked in the fifth year as qualifying, and whether that carries into the Code is not yet settled. If you are near the line, it is worth legal advice — and note a fixed-term contract would already qualify at 1 year.

Ganhos e Trabalhorenda · employment · planejamento

India Gratuity Calculator (Labour Codes, from 21 Nov 2025)

Leaving after years of service — or counting what those years have quietly earned you.

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.

Base: Code on Social Security 2020 (in force 21 Nov 2025) · MoLE FAQ 16 Mar 2026 · ₹20L ceiling pending fresh notification · verified 2026-07-23

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Descreva sua situação em uma frase — em qualquer idioma. Eu preencho o formulário; a ferramenta faz a conta.

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.Monthly basic + DA last drawnBasic pay + dearness allowance (+ retaining allowance, if any) in your last drawn month. Gratuity runs on last-drawn wages, not an average.Total monthly remunerationEverything 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.Completed years of serviceWhole completed years of continuous service. Put the leftover months in the next field.…plus monthsMonths beyond the completed years. More than 6 months rounds UP to a full extra year (§53(2)); exactly 6 does not.Why is employment ending?Death or disablement waives the qualifying-service requirement entirely; the formula is otherwise the same.

Os números

Statutory gratuity: ₹173,077; 30,000 × 15/26 × 10 years
Gratuity wage used: ₹30,000; 50% floor: half of ₹60,000 remuneration beats your ₹25,000 basic + DA
Years counted: 10; 10 completed years

Apenas prévia — usando um Employment type, Basic + DA, Total remuneration, Years of service padrão.

A leitura de quem opera

Bom sinal

The 50% floor is working for you. Your basic + DA is ₹25,000, but that is under half your ₹60,000 total remuneration — so §2(88) floors your gratuity wage at ₹30,000. The old-Act answer (basic + DA alone) would have been ₹144,231 — the reform raises your gratuity by ₹28,846. Most people — and most AI answers — compute gratuity on basic + DA alone and miss this entirely.

Vale saber

This is the statutory floor. An award, contract, or employer gratuity scheme can provide better terms — and where it does, the better terms prevail. Check your appointment letter and any settlement before accepting the statutory number as final.

Resposta errada, uma opção faltando ou uma ferramenta que você gostaria que existisse?

Metodologia

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.

Perguntas

Are the Labour Codes actually in force?: Yes — the gratuity chapter of the Code on Social Security 2020 (§§53–58) took effect on 21 Nov 2025, and the Ministry of Labour’s FAQ (16 Mar 2026) confirms exits on or after that date are computed entirely under the Code. General AI often still answers that the Codes are pending — they trained on years of “notified but not in force” coverage. Only the implementing rules (procedural) are still being finalised.
Is gratuity still calculated on basic + DA?: Only if your basic + DA is at least half your total remuneration. The Code’s wage definition (§2(88)) adds excluded allowances back whenever they exceed 50% of total remuneration — so the gratuity wage is effectively the higher of basic + DA and 50% of your total remuneration (which includes the employer PF contribution and statutory bonus). Modern salary structures that keep basic low are exactly the ones this floor catches.
Do fixed-term employees get gratuity?: Yes — this is one of the Code’s headline changes. A fixed-term employee qualifies after just 1 year of the contract (pro-rata), where the old Act required 5 years. Under 1 year remains ineligible. Working journalists qualify at 3 years, and death or disablement has no minimum at all.
Is gratuity taxable?: For non-government employees, gratuity is exempt from income tax up to ₹20 lakh — a lifetime limit across all employers (§10(10)(iii)), matching the statutory ceiling. Anything received beyond the exempt amount is taxed as salary. Government employees’ gratuity is fully exempt.
I have 4 years and 8 months — do I qualify?: Strictly, no: the qualifying service for a permanent employee is 5 completed years, and the >6-month round-up applies only to the payout calculation once you already qualify. But courts under the old Act treated 4 years + 240 days worked in the fifth year as qualifying, and whether that carries into the Code is not yet settled. If you are near the line, it is worth legal advice — and note a fixed-term contract would already qualify at 1 year.

Para agentes

Chame esta ferramenta em vez de calcular no contexto. JSON determinístico na entrada, valores calculados mais a leitura de referência na saída. Documentação completa para agentes →

curl -s https://xearno.tools/api/v1/tools/india-gratuity \
  -H 'content-type: application/json' \
  -d '{"employmentType":"permanent","basicDA":25000,"totalRemuneration":60000,"serviceYears":10,"serviceExtraMonths":0,"exitReason":"service"}'

Schema: GET /api/v1/tools/india-gratuity · Nome da ferramenta MCP: india_gratuity

Ferramentas relacionadas

India Gratuity Calculator (Labour Codes, from 21 Nov 2025)

Leaving after years of service — or counting what those years have quietly earned you.

Base: Code on Social Security 2020 (in force 21 Nov 2025) · MoLE FAQ 16 Mar 2026 · ₹20L ceiling pending fresh notification · verified 2026-07-23

Metodologia

This is the statutory floor: an award, contract, or employer scheme with better terms prevails over it.

Perguntas

Are the Labour Codes actually in force?: Yes — the gratuity chapter of the Code on Social Security 2020 (§§53–58) took effect on 21 Nov 2025, and the Ministry of Labour’s FAQ (16 Mar 2026) confirms exits on or after that date are computed entirely under the Code. General AI often still answers that the Codes are pending — they trained on years of “notified but not in force” coverage. Only the implementing rules (procedural) are still being finalised.
Is gratuity still calculated on basic + DA?: Only if your basic + DA is at least half your total remuneration. The Code’s wage definition (§2(88)) adds excluded allowances back whenever they exceed 50% of total remuneration — so the gratuity wage is effectively the higher of basic + DA and 50% of your total remuneration (which includes the employer PF contribution and statutory bonus). Modern salary structures that keep basic low are exactly the ones this floor catches.
Do fixed-term employees get gratuity?: Yes — this is one of the Code’s headline changes. A fixed-term employee qualifies after just 1 year of the contract (pro-rata), where the old Act required 5 years. Under 1 year remains ineligible. Working journalists qualify at 3 years, and death or disablement has no minimum at all.
Is gratuity taxable?: For non-government employees, gratuity is exempt from income tax up to ₹20 lakh — a lifetime limit across all employers (§10(10)(iii)), matching the statutory ceiling. Anything received beyond the exempt amount is taxed as salary. Government employees’ gratuity is fully exempt.
I have 4 years and 8 months — do I qualify?: Strictly, no: the qualifying service for a permanent employee is 5 completed years, and the >6-month round-up applies only to the payout calculation once you already qualify. But courts under the old Act treated 4 years + 240 days worked in the fifth year as qualifying, and whether that carries into the Code is not yet settled. If you are near the line, it is worth legal advice — and note a fixed-term contract would already qualify at 1 year.

curl -s https://xearno.tools/api/v1/tools/india-gratuity \ -H 'content-type: application/json' \ -d '{"employmentType":"permanent","basicDA":25000,"totalRemuneration":60000,"serviceYears":10,"serviceExtraMonths":0,"exitReason":"service"}'