Retirement Gratuity Calculations: What will be gratuity for government employee with Rs 80,000 as last-drawn basic pay and 30 years of service?
Gratuity for UPS vs NPS vs OPS: Gratuity is an important amount for government employees since it can help them achieve their retirement financial goals. It can be substantial since their service years may be in decades. But does opting for a pension system such as Old Pension Scheme (OPS), New Pension Scheme (NPS), or Unified Pension Scheme (UPS) make a difference to their gratuity amount?
Gratuity for UPS vs NPS vs OPS: Gratuity is a reward for government or private sector service employees for their long-term service to their employees. A minimum of 5 years of service for either of them is necessary to get gratuity. For government employees, there is no minimum limit to get gratuity; the maximum limit, however, is Rs 20 lakh for a qualifying service of 33 years or more, which is 16½ times the basic pay and dearness allowance (DA). But what if, at retirement, you opt for Old Pension Scheme (OPS), New Pension System (NPS), or Unified Pension Scheme (UPS)? Will it have an impact on gratuity at retirement? What will be your gratuity in OPS, NPS, and UPS if your basic pay at the time of retirement is Rs 80,000 and you have a service period of 30 years?
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(Disclaimer: Our calculations are projections. Actual calculations may vary.)
Types of gratuity for government employees
There are 3 main types of gratuity for government employees:
Retirement gratuity
Death gratuity
Service gratuity
Retirement gratuity
One gets this lump sum amount at the time of retirement. The minimum service completion period to get retirement gratuity is 5 years. There is no minimum gratuity amount limit for this category.
Retirement gratuity
However, the maximum limit on completion of 33 years or more is Rs 20 lakh. However, in NPS, it has been increased to Rs 25 lakh for central government employees.
How is retirement gratuity calculated?
Retirement gratuity is calculated at 1/4th of a month’s basic pay and DA drawn on the date of retirement for each completed 6-month period of qualifying service.
Death gratuity
The nominee or a family member of a deceased government employee gets this one-time lump sum benefit. There is no minimum length of service rendered by the deceased employee. The maximum death gratuity can be Rs 20 lakh. For central government employees following NPS, it is Rs 25 lakh.
Death gratuity entitlement
| Qualifying Service | Rate |
| Less than one year | 2 times of basic pay |
| One year or more but less than 5 years | 6 times of basic pay |
| 5 years or more but less than 11 years | 12 times of basic pay |
| 11 years or more but less than 20 years | 20 times of basic pay |
| 20 years or more | Half of emoluments for every completed 6 monthly period of qualifying service subject to a maximum of 33 times of emoluments |
Service gratuity
If a government employee's service is less than 10 years, they are not eligible to get a pension. However, in such a case, they will receive service gratuity over and above their retirement gratuity.
How is service gratuity calculated?
The service gratuity is calculated at the half month’s last-drawn basic salary plus DA for each completed 6-month period of qualifying service.
Gratuity in OPS vs NPS vs UPS
The calculation for gratuity doesn't depend on the pension system that you are opting for. The gratuity depends on the basic salary and DA at retirement.
Gratuity in OPS vs NPS vs UPS
So, the amount will effectively remain the same in different pension systems. It needs to be known that UPS will be available for central government employees from April 1, 2025.
OPS: Gratuity on Rs 80,000 basic pay, 30 years of service
| OPS | |
| Last basic pay (BP) | ₹ 80,000 |
| DA (53%) | ₹ 42,400 |
| Total | ₹ 1,22,400 |
| Total Qualifying Years | 30 |
| Total Half Service Years | 60 |
| Formula | (BP+DA)Xservice half yearsX1/4 |
| Total Gratuity | ₹ 18,36,000 |
NPS: Gratuity on Rs 80,000 basic pay, 30 years of service
| NPS | |
| Last basic pay (BP) | ₹ 80,000 |
| DA (53%) | ₹ 42,400 |
| Total | ₹ 1,22,400 |
| Total Qualifying Years | 30 |
| Total Half Service Years | 60 |
| Formula | (BP+DA)Xservice half yearsX1/4 |
| Total Gratuity | ₹ 18,36,000 |
UPS: Gratuity on Rs 80,000 basic pay, 30 years of service
| UPS | |
| Last basic pay (BP) | ₹ 80,000 |
| DA (53%) | ₹ 42,400 |
| Total | ₹ 1,22,400 |
| Total Qualifying Years | 30 |
| Total Half Service Years | 60 |
| Formula | (BP+DA)Xservice half yearsX1/4 |
| Total Gratuity | ₹ 18,36,000 |