Gratuity calculator

This calculator works out the retirement gratuity of a central government employee under Rule 45 of the CCS (Pension) Rules, 2021: one-fourth of your emoluments for each completed six-monthly period of qualifying service, up to 16.5 times your emoluments and a ceiling of Rs. 25 lakh. Emoluments are your basic pay plus dearness allowance. The gratuity is a one-time payment at retirement and is fully tax-free for a government employee. Enter your figures below; the method, the caps, and a worked example follow so you can check the figure by hand.

Calculator

Your gratuity at a glance

What the calculator computes

The calculator takes your basic pay, your dearness allowance, and your qualifying service, and returns the retirement gratuity payable, after applying the two caps.

The retirement gratuity, sometimes called the Death-cum-Retirement Gratuity or DCRG, is a lump sum paid once at retirement, over and above the pension. It rewards length of service: the longer you have served, the more six-monthly periods count, and the larger the gratuity, up to the limits. It is separate from the commutation of pension lump sum and from the pension itself, and it is fully exempt from income tax for a government employee.

The formula

The retirement gratuity is worked out from your emoluments, your qualifying service in six-monthly periods, and the fraction one-fourth.

Retirement gratuity = one-fourth of emoluments x number of completed six-monthly periods of qualifying service

Your emoluments are your basic pay in the pay matrix plus the dearness allowance admissible on the date of retirement. Dearness allowance is included in emoluments for gratuity, which is a point worth noting because it is not counted for the ordinary pension. Your qualifying service is counted in completed six-monthly periods, up to a maximum of 66, which is 33 years. A fraction of service of three months or more is treated as one more completed six-monthly period, and a fraction of less than three months is ignored.

The two caps

The formula is subject to two ceilings, and the lower of them applies.

The first is that the gratuity may not exceed 16.5 times your emoluments. This cap is reached at 33 years of qualifying service, because 66 six-monthly periods multiplied by one-fourth equals 16.5. So an employee with the full 33 years of service receives exactly 16.5 times emoluments, and further service does not add to the gratuity.

The second is the monetary ceiling of Rs. 25 lakh. This limit was Rs. 20 lakh from 1 January 2016 under the 7th Central Pay Commission, and the Commission provided that it would rise by 25 per cent whenever dearness allowance rose by 50 per cent. Dearness allowance reached 50 per cent with effect from 1 January 2024, so the ceiling was raised by 25 per cent, from Rs. 20 lakh to Rs. 25 lakh, with effect from 1 January 2024, by the Department of Pension and Pensioners’ Welfare Office Memorandum of 30 May 2024. So the current maximum gratuity, whatever the emoluments or the service, is Rs. 25 lakh.

Which cap binds depends on your emoluments. If 16.5 times your emoluments is less than Rs. 25 lakh, the 16.5 times cap applies and you reach it at 33 years. If 16.5 times your emoluments is more than Rs. 25 lakh, the Rs. 25 lakh ceiling applies, and you reach it before 33 years. The chart above shows the point at which your gratuity flattens.

A worked example

Take an employee retiring with a basic pay of Rs. 50,000 and dearness allowance at 60 per cent, after 33 years of qualifying service. The emoluments are Rs. 50,000 plus 60 per cent, which is Rs. 80,000. The qualifying service of 33 years is 66 completed six-monthly periods. The gratuity is one-fourth of Rs. 80,000, which is Rs. 20,000, multiplied by 66, which is Rs. 13,20,000. This is exactly 16.5 times the emoluments of Rs. 80,000, and it is below the Rs. 25 lakh ceiling, so the gratuity payable is Rs. 13,20,000, paid once and tax-free.

A senior employee with emoluments of, say, Rs. 3,20,000 and 33 years of service would compute to Rs. 52,80,000 before the caps, but this exceeds the Rs. 25 lakh ceiling, so the gratuity payable is capped at Rs. 25,00,000.

Death gratuity

The same rule provides a death gratuity, payable to the family if an employee dies in service, and it has no minimum service requirement. It is paid on a graded scale: two times emoluments for less than one year of service, six times for one to five years, twelve times for five to eleven years, twenty times for eleven to twenty years, and, for twenty years or more, one-half of emoluments for each completed six-monthly period up to a maximum of 33 times emoluments, subject to the same Rs. 25 lakh ceiling. This calculator computes the retirement gratuity; the death gratuity scale is set out in the gratuity article.

How to use the result

The gratuity is a one-time payment at retirement, in addition to your pension and any commutation of pension lump sum, and it is fully tax-free for a government employee, so the figure the calculator shows is what reaches you. Employees of public sector undertakings and the private sector are instead covered by the Payment of Gratuity Act, 1972, under which gratuity is 15/26 of last drawn wages for each completed year of service, capped at Rs. 20 lakh; this calculator is for central government employees under the CCS (Pension) Rules.

The calculator is a guide based on the standard rule and the current ceiling; your actual gratuity is fixed on your pension papers by the sanctioning authority. The 8th Central Pay Commission , constituted in November 2025, may revise the ceiling and the emoluments basis on implementation, but as on 3 July 2026 the ceiling is Rs. 25 lakh and the rule is as above. For the wider retirement framework, see the central government pension article.

See also

• Gratuity for central government employees
• Central government pension
• Commutation of pension calculator
• Commutation of pension
• Dearness allowance
• Pay matrix
• National Pension System
• Unified Pension Scheme
• Family pension
• Income tax for government employees
• 7th CPC salary calculator
• 8th Central Pay Commission
• Central government employees in India

External references

• Department of Pension and Pensioners’ Welfare
• CCS (Pension) Rules, 2021 (Rule 45)
• Income Tax Department
• Department of Expenditure, Ministry of Finance

References

1. Rule 45, Central Civil Services (Pension) Rules, 2021, on retirement gratuity (one-fourth of emoluments per six-monthly period, maximum 16.5 times emoluments) and death gratuity.
2. Department of Pension and Pensioners’ Welfare, Office Memorandum No. 28/03/2024-P&PW(B)/Gratuity/9559, dated 30 May 2024, raising the gratuity ceiling from Rs. 20 lakh to Rs. 25 lakh with effect from 1 January 2024, on dearness allowance reaching 50 per cent.
3. Income-tax Act, 1961, Section 10(10)(i), exempting the gratuity of a government employee from income tax.
4. The Payment of Gratuity Act, 1972, for employees of public sector undertakings and the private sector (15/26 of wages per year, ceiling Rs. 20 lakh).