Reviewed by Artha Research·Last updated 13 April 2026
Gratuity vs EPF
Which employer benefit matters more when you resign? See how gratuity and EPF compare at different tenures.
Your numbers
Same basic salary and tenure — see which employer benefit builds more.
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Combined exit benefits
₹34.4L
EPF builds 92% of your exit benefits
At 10 years of service, EPF accumulates ₹31.5L while gratuity pays ₹2.9L. EPF grows with compounding; gratuity grows linearly with tenure.
Both are employer obligations. EPF grows faster with time due to compounding — longer tenure disproportionately benefits your EPF.
Gratuity vs EPF
EPF
₹31.5L
WinnerGratuity
₹2.9L
EPF wins by 992%.
EPF dominates at longer tenures.
Gratuity payout
₹2.9L
EPF maturity
₹31.5L
Combined exit value
₹34.4L
EPF share
92%
Gratuity requires 5 years of continuous service
If you leave before completing 5 years, gratuity is zero. EPF is yours from day one (with conditions on employer share).
EPF compounds; gratuity doesn't
EPF earns interest on the growing balance every year. Gratuity is a formula-based payout with no compounding — it only scales with last drawn salary and years.
At a glance
- What it compares
- Gratuity payout (linear formula) vs EPF retirement corpus (compounded). Same basic salary and tenure.
- Key insight
- EPF dominates at longer tenures because it compounds. Gratuity grows linearly with years.
- Who should use this
- Anyone evaluating their total exit benefits before a job switch.
- Verdict logic
- Shows combined exit value and the share of each component.
How It Works
This is the drill-down layer. The flagship flow leads with a recommendation, and this page lets you inspect the underlying model.
- Gratuity = (basic × 15/26) × years of service.
- EPF = compounded balance of 12% employee + 12% employer contributions.
Assumptions
The recommendation stays blunt, but the assumptions remain visible.
- Gratuity uses Payment of Gratuity Act formula.
- EPF assumes 12% + 12% contribution rates.
- Salary growth at 8% per year for EPF projection.
FAQ
The follow-up questions people usually ask after the main recommendation is already clear.
Do I lose gratuity if I leave before 5 years?
Yes. Gratuity requires 5 years of continuous service under the Gratuity Act. EPF balance is yours from day one (employer share vests after conditions).
Sources & references
Every formula and assumption above is grounded in these authoritative sources.
Related tools & decisions
Keep going from here — each link carries the same cluster context.
Sibling tools
Gratuity Calculator
When you leave your current role, how much gratuity lands in your account — and how much of it is taxed? See the payout, the ₹20L exemption math, and whether staying another few years changes the picture meaningfully.
EPF Calculator
Will EPF alone fund your retirement? See the projected corpus at 60, what drives it, and whether a VPF top-up is worth considering.