India salary guide / 2026
Severance Pay Calculator India
Estimate common exit-payment components—notice pay, leave encashment, ex-gratia and gratuity—without confusing a planning estimate with a guaranteed legal entitlement.
Last reviewed August 2026 · Informational content only
Severance estimate
Estimate your exit payout
Model common components separately so your final settlement conversation starts with clear numbers.
Gratuity estimate
₹1,73,077
Notice pay
₹1,38,462
Leave encashment
₹34,615
Estimated total
₹3,46,154
Planning estimate only. Appointment terms, company policy, earned leave rules, tax treatment and applicable labour law can change the final settlement.
What is severance pay in India?
Severance pay is the amount an employee may receive when employment ends because of redundancy, restructuring, a separation agreement or another employer-led exit. India does not have one universal severance formula for every private-sector employee. The appointment letter, standing orders, company policy, settlement terms and applicable labour law all matter.
This calculator separates common settlement components rather than presenting one guaranteed legal entitlement. Use it as a conversation starter with HR, payroll or an employment adviser.
- Notice pay may replace some or all of a contractual notice period.
- Leave encashment is usually based on eligible unused leave and the employer's policy.
- Gratuity generally requires the relevant eligibility period and is calculated under the applicable rules.
How the estimate is calculated
The estimate uses a 26-day working-month convention for daily pay. It applies 15/26 × last drawn basic plus DA × completed years for a simple gratuity estimate after five years, then adds notice pay, leave encashment and any entered ex-gratia amount.
Your actual full-and-final statement may include unpaid salary, incentives, deductions, loans, tax withholding, reimbursements or recoveries that this tool does not model.
- Review whether your offer defines notice pay on gross salary or basic salary.
- Check if variable compensation is earned, payable or forfeited at exit.
- Ask for a component-wise settlement statement before signing a release.
Worked example
For ₹60,000 monthly basic salary, zero DA, five completed years, 60 notice days and 15 eligible leave days, the calculator shows separate estimates for gratuity, notice pay and leave encashment. The result changes immediately when you adjust the service period or salary basis.
The example is intentionally transparent: a clean breakdown is more useful than an unexplained total, especially when comparing a negotiated exit package with your contractual benefits.
Tax and legal context
Severance, notice pay, leave encashment and gratuity can have different tax treatment depending on the facts and applicable exemptions. Do not treat the estimate as tax advice. Confirm the final treatment with payroll or a qualified tax professional.
Never use this calculator to hide income, fabricate service records or avoid lawful deductions. It is designed for documentation, budgeting and informed questions.
Frequently asked questions
Not in one uniform way for every employee. Entitlement can depend on the contract, separation reason, applicable labour law, company policy and settlement terms.