Gratuity and full and final calculator
Work out gratuity under the new labour codes, then the full and final settlement: pending salary, leave encashment, notice pay and other dues.
- HR teams closing an exit cleanly
- Employees checking what they will receive
- Consultants advising on settlements
Employee details
Under the labour codes, wages for gratuity must be at least half of total pay.
Full and final
Full and final settlement
Salary days use total pay ÷ 30, and leave encashment uses basic + DA ÷ 30. Your policy may use 26 working days instead. Income tax on gratuity and leave encashment depends on the employee's case.
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The formula
Gratuity = last wages (basic + DA) × 15 ÷ 26 × years of service. A part year of more than six months counts as a full year. The limit is ₹20 lakh.
Who gets it
Permanent staff after five years of continuous service. Fixed-term staff after one year, in proportion to service. It is also paid on death or disablement, whatever the service.
Wages are at least half
The labour codes count wages as at least 50% of total pay. When basic + DA is lower, the difference is added back for gratuity.
When to pay
Gratuity within 30 days of it falling due. Final wages within two working days of the exit under the Code on Wages.
Exits, settlements and payslips in one flow
USR Payroll is coming soon as an add-on to the USR People Suite: ₹29 ($0.33) per employee a month with the suite, or ₹49 ($0.56) on its own with HRIS, leave and attendance.
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