Gratuity Eligibility Checker
Check if you're eligible for gratuity and calculate the amount under the Payment of Gratuity Act, 1972.
Result based on Payment of Gratuity Act, 1972.
How Gratuity Eligibility Works
For resignation, retirement, retrenchment, and VRS, the employee must have completed at least 5 years of continuous service. Exactly 4 years 240 days is treated as 5 years by some courts.
In cases of death or permanent total disability, gratuity becomes payable regardless of how long the employee served — even on day one.
Continuous service includes approved leaves (EL, SL, ML), lay-offs and temporary suspensions. An employee missing 240 working days in a year may not get that year counted towards service.
Gratuity Calculation Formula
Maximum gratuity payable under the Act: ₹20 lakhs (revised 2019). Above ₹20L is ex-gratia at employer's discretion.
To calculate the exact gratuity amount, use the Gratuity Calculator in the Finance section.
Frequently asked questions
What if I have exactly 4 years and 8 months of service?
Under Section 2A of the Payment of Gratuity Act, 1972, for the purpose of calculating the number of completed years, a period of six months or more is treated as a full year. So 4 years 7 months does not qualify, but 4 years 8 months (>6 months in the 5th year) is treated as 5 years by most interpretations and courts — making you eligible. However, some employers dispute this; get legal advice if your employer refuses.
Can my employer deduct gratuity for misconduct?
Yes, under Section 4(6) of the Payment of Gratuity Act, gratuity can be forfeited wholly or partially if the employee is terminated due to riotous or disorderly conduct, any act of violence, or any act constituting an offence involving moral turpitude committed during employment. Simple resignation or poor performance does not justify forfeiture.
Is gratuity taxable?
For government employees, gratuity is fully exempt from income tax. For private sector employees, the exemption is the least of: (a) actual gratuity received, (b) ₹20 lakhs (revised in 2019), or (c) 15 days salary × years of service. Amount above the exemption is taxable as salary income.
Does gratuity apply to contract or fixed-term employees?
Yes, if the contract employee completes 5 years of continuous service with the same employer, they are eligible for gratuity. The nature of contract (fixed-term, project-based) does not exclude them as long as service is with the same organisation for 5+ years.
When must the employer pay gratuity?
Under the Payment of Gratuity Act, gratuity must be paid within 30 days of the date it becomes payable. If there is a delay, the employer is liable to pay simple interest at the rate of 10% per annum from the date it became payable. Employees can file a claim with the Controlling Authority (typically the Labour Commissioner) if the employer refuses.