With a last basic + DA of ₹50,000 and 5 years of service, your gratuity is about ₹1,44,231 (₹50,000 × 15 ÷ 26 × 5).
Last basic + DA
₹50,000
Years of service
5
Gratuity
₹1,44,231
If service is 5 years 7 months
₹1,73,077
Tax-free part (private sector)
₹1,44,231
If your employer is not covered by the Act
Employers with fewer than 10 staff may use the 15/30 formula on completed years: ₹1,25,000 in this case.
Good to know
Permanent employees need 5 years of continuous service (not needed in case of death or disability); fixed-term employees qualify after 1 year under the new labour codes.
If basic + DA is less than half your total pay, the new codes add the extra allowances back into the gratuity base.
Up to ₹20 lakh of gratuity is tax-free for private sector employees.