Calculate your end-of-service gratuity from your monthly salary, years of service, and your own days-of-salary-per-year rate — with an optional two-tier rate that changes after a threshold, computed instantly in your browser.
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An end-of-service gratuity, sometimes called severance pay, is a lump-sum benefit that some countries' labor laws require employers to pay when an employee's service ends, based on their final salary and total years of service. Whether such a scheme exists at all — and, where it does, its exact formula — differs enormously by country: some pay a single fixed rate of days' salary per year of service, others pay a lower rate for the first several years and a higher rate afterward, and some countries have no statutory gratuity scheme whatsoever. Rather than hard-coding any one country's formula, this calculator lets you enter your own monthly salary, years of service, and the days-per-year rate (or two rates, with a threshold where the rate changes) that applies to you, converting your monthly salary into a daily wage using the widely used salary-divided-by-30 convention before applying your rate.
An end-of-service gratuity, at its simplest, converts an employee's years of loyal service into a lump-sum payment based on their final salary. The building blocks of the calculation are consistent everywhere it exists: a daily wage (usually the monthly salary divided by 30), a rate expressed as a number of days' salary owed per year of service, and the number of years actually served. Multiply the three together and you get the gratuity amount for that period of service.
What differs from country to country — often dramatically — is the rate itself, and whether it changes over the course of an employee's tenure. Some labor codes specify a single flat rate, for instance 21 days of salary for every year served, applied uniformly regardless of how long the employee stayed. Others use a tiered structure: a lower rate, such as half a month's salary per year, for an employee's first five years of service, followed by a higher rate, such as a full month's salary per year, for every year beyond that threshold. Still other countries have no end-of-service gratuity scheme in their labor law at all, relying instead on other retirement or severance mechanisms such as pension contributions.
Because this variation is so wide, a calculator that assumes any single country's formula would be actively wrong for employees anywhere else — and even within one country, gratuity rules occasionally change with new labor legislation. This calculator sidesteps that problem entirely by asking you for the structure that applies to you: a single rate for your whole tenure, or a two-tier rate with your own threshold and both day-counts, sourced from your own country's labor law or your employment contract. The daily-wage conversion (monthly salary divided by 30) is the one piece of this calculation that is a near-universal mathematical convention rather than a legal rule, so it's applied consistently no matter which country's gratuity rate you're working with.
The result is a transparent, tier-by-tier breakdown of exactly how your gratuity was calculated — useful whether you're estimating your entitlement ahead of resigning, checking a final settlement figure from your employer, or simply curious how the benefit works in your country.
End-of-service gratuity (also called severance pay or an end-of-service benefit) is a lump-sum payment some countries require employers to pay employees when their employment ends, based on their salary and years of service. Not every country has this benefit, and where it exists, the exact formula varies widely.
Gratuity formulas differ enormously by country — some pay a fixed number of days' salary for every year of service, others increase the rate after a certain number of years, and some countries have no such scheme at all. Entering your own rate(s) keeps this calculator accurate for whichever system applies to you.
Dividing a monthly salary by 30 days is a common convention used in most end-of-service/gratuity formulas worldwide to convert a monthly figure into a daily rate. It's a mathematical convention, not a country-specific law, so it applies consistently regardless of which country's gratuity rate you enter.
Some countries pay a lower gratuity rate for an employee's first several years of service and a higher rate for years beyond that threshold (for example, a lower rate for the first 5 years and a higher rate afterward). The two-tier mode lets you model that by entering the threshold and both rates.
No. Some countries have no statutory end-of-service or severance payment at all, while others mandate one calculated very differently. Check your own country's labor law or your employment contract to see whether this applies to you and, if so, at what rate.