Layoff Severance Calculator – India

How Layoff Severance Pay Works in India

In India, severance pay is not a single fixed amount. It usually consists of notice period pay, gratuity (if applicable), and retrenchment compensation under the Industrial Disputes Act.

• Notice Pay: Salary paid if notice period is not served.
• Gratuity: Applicable to permanent employees with 5+ years of service.
• Retrenchment Compensation: Typically 15 days’ salary per year of service.

What This Severance Calculator Includes

• Notice period payout estimation
• Gratuity calculation (if eligible)
• Retrenchment compensation estimate
• Support for permanent and contract employees

What It Does Not Include

• Income tax on severance
• Company-specific HR policies
• Legal dispute scenarios

Frequently Asked Questions

Is severance pay mandatory in India?

Severance pay is not universally mandatory. It depends on employment type, company size, and whether retrenchment laws apply.

Is gratuity paid during layoffs?

Gratuity is usually payable if the employee has completed at least 5 years of continuous service and is a permanent employee.

Are contract employees entitled to severance?

Contract employees typically receive notice period pay as per their contract, but statutory severance may not apply.

Is severance pay taxable in India?

Certain components of severance pay may be taxable. Tax treatment depends on the nature of payment and applicable exemptions.

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