India Severance Pay Calculator 2025
Calculate end-of-service benefits and severance costs accurately according to Indian Labor Laws. Free calculator for HR professionals, hiring managers, and employees in India.
Calculate India Severance Pay in Seconds
Our free India severance calculator helps you accurately estimate end-of-service gratuity based on current Indian labor regulations. Whether you're calculating for different wage categories, get instant, compliant results.
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100% compliant with Indian Labor Laws
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Supports permanent, temporary, and contract employment
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Handles resignation, retrenchment, and layoff scenarios
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Instant, accurate severance pay calculations
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Free to use for all HR professionals in India
Why Choose Our India Severance Pay Calculator
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Digital India Compliance
Stay compliant with India's evolving labor codes and digital transformation initiatives under the new employment regulations.
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Industrial Relations Support
Navigate complex industrial relations and dispute resolution processes with accurate severance calculations for peaceful terminations.
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Migrant Worker Protection
Ensure compliance with special protections for migrant workers and inter-state employment regulations across India.
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Social Security Integration
Calculate severance alongside social security and welfare benefits for comprehensive employee financial planning.
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Contract Labor Compliance
Handle contract labor and gig worker protections with specialized calculations for India's diverse employment landscape.
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Safety Standards Aligned
Ensure calculations meet workplace safety and health standards and occupational injury compensation requirements.
India End of Service Benefits: Complete Reference Guide 2025
India Severance Pay Rates by Employment Type
Employment Type in India
Severance Pay Rate
Example (INR 50,000 monthly salary)
Permanent Employee
15 days average pay per year
INR 25,000 per year of service
Contract/Temporary
Varies by state and agreement
As per contract terms
Permanent vs Contract Employment Severance in India
India Permanent Employee Severance
- Employee Resignation: 15 days average pay per year of service
- Employer Termination: Compensation as per Industrial Disputes Act
- Calculation: 240 days in preceding 12 months
India Contract Employee Severance
- Employee Resignation: As per agreement terms
- Employer Termination: Notice pay or compensation
- Calculation: Applicable after 5 years continuous service
How to Calculate India Severance Pay: 5-Step Guide
1
Determine Indian Employment Category
Identify if the employee is permanent, contract, or temporary worker in India, as this significantly affects severance eligibility under different labor laws.
2
Calculate Continuous Service Period
Count continuous service period including minimum 240 working days in the preceding 12 months for retrenchment compensation eligibility.
3
Identify Termination Type
Determine if it's retrenchment, layoff, voluntary resignation, retirement, or mutual separation as per Indian labor law definitions.
4
Apply Indian Severance Formula
Use Indian wage calculation standards: 15 days average pay per completed year of service for retrenchment compensation.
5
Calculate Final India Severance Amount
Sum up retrenchment compensation, notice pay, and any applicable gratuity. Use our India gratuity calculator for comprehensive calculations.
India Severance Pay FAQ: Most Asked Questions 2025
What is retrenchment compensation under Indian labor law?
Retrenchment compensation in India is paid when an employer terminates a workman's service for economic reasons. It equals 15 days' average pay for every completed year of continuous service, with a minimum of one month's wages required for eligibility.
Do Indian employees get severance pay for voluntary resignation?
No, employees who voluntarily resign in India are not entitled to retrenchment compensation. However, they may be eligible for gratuity if they have completed 5 years of continuous service and accrued leave encashment.
How do India's new labor codes affect severance calculations?
India's new labor codes consolidate multiple laws and introduce standardized compliance requirements. The basic severance calculation remains 15 days' pay per year, but includes enhanced protections for contract and gig workers.
What is the difference between layoff and retrenchment in India?
Layoff in India is temporary suspension of work due to shortage of materials or power, while retrenchment is permanent termination for economic reasons. Both require compensation, but layoff compensation is calculated differently under Industrial Disputes Act.
Are migrant workers entitled to the same severance benefits in India?
Yes, migrant workers have special protections under Indian law and are entitled to the same severance benefits plus additional support for return transportation and unpaid wages during inter-state employment.
Can Indian employers avoid paying severance through penalties or deductions?
Indian employers cannot avoid paying legally mandated severance compensation. While penalties for non-compliance exist for violations, they do not reduce the employee's right to full retrenchment compensation and statutory benefits.
