Actuaries valuing gratuity and compensated absences (AS 15 / Ind AS 19) now need data that reflects the Codes:
- Wage base: gratuity and leave are on "wages" as defined in the Code on Wages, with the 50% add-back. Use the recomputed wage for each employee, not basic plus DA alone.
- Fixed-term employees: gratuity is payable pro rata, without the five-year condition (SS Code s. 53). Separate fixed-term employees, with their contract end dates.
- Ceiling: gratuity is capped at ₹20 lakh (or as notified).
- Leave: annual leave is earned at one day for 20 days worked. Up to 30 days carry forward, encashment at year end on request, and encashment on leaving (OSH Code s. 32).
- Past service: the change in the wage base may create a past-service cost in the year the Codes apply.
- Data per employee: date of birth, date of joining, employment type, wages (with the add-back), leave balance and the policy on carry-forward and encashment.
The HR desk exports the employee register with these fields. Labour Law Guru can also prepare the wage-base workings for the actuary.
Last reviewed 18-10-2026. General information, not legal advice for a specific case. Check the latest Act, Rules and notifications of the appropriate government before acting.