How is retrenchment compensation calculated?

A common expression is 15 days’ average pay for every completed year of continuous service. Not every exit is a retrenchment — confirm with counsel.

When is gratuity payable?

The Payment of Gratuity Act generally needs five years’ continuous service. Formula often used: 15/26 × last monthly salary × years.

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Severance Pay Calculator (India)

Estimate retrenchment compensation (15 days’ average pay per completed year), notice pay, gratuity (15/26) and leave encashment. Illustrative — not a legal opinion.

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Estimate exit dues

Illustrative only. Retrenchment uses 15 days’ average pay per year. Gratuity uses 15/26 after 5 years.

Last monthly wages (₹)

Completed years of service

Notice months

Unused leave days

Results

Retrenchment compensation₹1,38,462

Notice pay₹40,000

Gratuity₹1,38,462

Leave encashment₹18,462

Total (illustrative)₹3,35,385

How it works

01
Enter last monthly wages
Use the wage definition in your standing orders.
02
Enter years of service
Completed years.
03
Add notice and unused leave
Notice pay and EL encashment are separate from retrenchment compensation.

Frequently asked questions

Keep the same numbers in payroll

These calculators are for a quick check in the browser. TiBook Payroll stores attendance, leave, shifts and monthly salary in one workspace — without a second HR app.

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Estimates only. Actual wages, EPF, EPS, gratuity and retrenchment depend on statute, wage ceilings and your appointment terms. TiBook does not file PF, ESI or income-tax returns.