Fixed-Term Employee Gratuity Calculator
Check your gratuity eligibility and payout on a fixed-term contract — 1 year, not 5.
Your inputs
Under Section 53 of the Code on Social Security, 2020 (in force since 21 November 2025), a genuine fixed-term contract employee qualifies for pro-rata gratuity after just 1 year of service when the contract ends — not the 5-year threshold that still applies to permanent employees. Same 15/26 formula, same ₹20 lakh statutory ceiling.
Two readings of the rounding rule
Section 53(2) counts "every completed year or part thereof in excess of six months" as a full year. How that interacts with straight pro-rata for a fixed-term contract isn't consistently explained across sources — here are both readings for your 18-month contract.
| Straight pro-rata (1.50 years) | ₹34,615 |
| If the >6-month round-up applies (1.50 years) | ₹34,615 |
Both readings land on the same figure for your contract length — the rounding ambiguity doesn't actually matter here.
Confirm which reading your employer/HR applies before relying on either number.
What changed from the old rule
Before 21 November 2025, gratuity required 5 continuous years of service, full stop — no exceptions for how the employment was structured. A fixed-term contract that ended after 1, 2, or 3 years paid zero gratuity, no matter how long or well the person worked.
| Under the old rule (pre-Nov 2025) | ₹0 |
| Under the new rule | ₹34,615 |
If your contract was renewed
This calculator assumes one continuous fixed-term contract. Whether service across renewed, back-to-back fixed-term contracts with the same employer aggregates toward the 1-year threshold is explicitly unsettled — it hasn't been definitively clarified. If your employment was a series of shorter renewed contracts rather than one term, confirm with your employer or a labour law consultant before assuming eligibility either way.
Estimates only. Figures are indicative and do not constitute financial advice.
About the Fixed-Term Employee Gratuity Calculator
If you're on a fixed-term contract, the old rule was simple and unforgiving: no gratuity unless you completed 5 continuous years, no matter how well your contract went. Since India's new Labour Codes took effect on 21 November 2025, that's no longer true for genuine fixed-term contract employees — Section 53 of the Code on Social Security, 2020 makes you eligible for pro-rata gratuity once your contract ends after at least 1 year of service, using the same 15/26 formula permanent employees have always used.
This is specifically for fixed-term contract employees — people hired for a defined period under a written contract, common in IT, project-based roles, and time-bound assignments. It does not lower the 5-year threshold for permanent employees, and it doesn't automatically apply to contract labour supplied by a staffing agency or gig/platform workers, whose treatment is different. Enter your last drawn monthly basic + DA and your total months of service on the contract to see whether you're eligible and what you'd be owed.
Two things worth knowing before you rely on the number: the ₹20 lakh statutory ceiling still applies, and how the law's "more than 6 months counts as a full year" rounding provision interacts with straight pro-rata calculation for partial years isn't consistently explained even across expert sources — this calculator shows both readings below the main result rather than picking one silently. If your employment was a series of renewed back-to-back contracts rather than one continuous term, whether that service aggregates toward the 1-year threshold is also still unsettled.
How to use this calculator
- Enter your last drawn monthly basic + DA.
- Enter your total months of service on the fixed-term contract.
- See whether you're eligible (12+ months) and your estimated gratuity payout.
Frequently asked questions
›How long do I need to work on a fixed-term contract to get gratuity?
At least 1 year (12 months) of actual service, once your fixed-term contract ends — a significant change from the 5-year threshold that still applies to permanent employees.
›Does this apply to me if I'm a contractor through a staffing agency, not directly employed?
Not necessarily — the 1-year rule under Section 53 is specifically for genuine fixed-term employment with a direct, written contract for a defined period. Contract labour supplied by an agency and gig/platform work are treated differently under the law.
›What formula is used to calculate the gratuity amount?
The same one used for permanent employees: (last drawn monthly basic + DA) × 15/26 × years of service, applied pro-rata for partial years, capped at the ₹20 lakh statutory ceiling.
›If my contract was renewed multiple times, does that count toward the 1-year threshold?
This is genuinely unresolved — whether service across renewed, back-to-back fixed-term contracts with the same employer aggregates toward the 1-year eligibility hasn't been definitively clarified. Confirm with your employer or a labour law consultant if this applies to you.
›When did this rule take effect?
The four new Labour Codes, including the Code on Social Security, 2020 that contains this provision, came into force on 21 November 2025.
What affects fixed-term employee gratuity?
- Total months of service
- Must reach at least 12 months for eligibility at all — below that, gratuity is zero regardless of salary.
- Employment structure
- Applies to genuine fixed-term contracts with a direct employer, not agency-supplied contract labour or gig/platform work, which follow different rules.
- The 6-month rounding provision
- A completed year or part-year in excess of 6 months counts as a full year under Section 53(2) — how this interacts with straight pro-rata for shorter contracts isn't uniformly explained across sources.