Gratuity Rules: How Much Gratuity Can You Receive After 10 Years on a ₹1 Lakh Salary?

Gratuity is a benefit paid by an employer to an eligible employee in recognition of their service. It can provide financial support when an employee retires, resigns or leaves employment under qualifying circumstances. The amount generally depends on the employee’s last eligible salary, length of service and the rules applicable to their employment. Under the standard formula for employees covered by the relevant provisions, gratuity is calculated using 15 days of eligible wages for each completed year of service, divided by 26. Eligibility requirements and exceptions can vary, including in cases involving death, disability or fixed-term employment.

For example, if an employee’s last eligible monthly salary, including basic pay and dearness allowance (DA), is ₹1,00,000 and they complete 10 years of eligible service, the calculation would be (₹1,00,000 × 15 × 10) ÷ 26, resulting in approximately ₹5,76,923, or ₹5.77 lakh. This is an illustrative estimate, not a guaranteed payment. The final amount may depend on the employee’s eligibility, the applicable legal provisions and any relevant statutory ceiling. Employees should verify their service records and salary components with their employer or HR department. If gratuity is delayed or incorrectly calculated, they can seek assistance from the appropriate gratuity authority.