Under Chapter V of the Code on Social Security:
- Eligibility: continuous service of five years, ending in retirement, resignation, death, disablement or termination. The five-year condition does not apply on death or disablement. A fixed-term employee gets gratuity pro rata, even with less than five years. Most readings of s. 53 take this as completion of one year.
- Formula: last drawn wages × 15 ÷ 26 × completed years of service. A part year of more than six months counts as a full year. Seasonal establishments use 7 days' wages.
- Wages include the 50% add-back under the Code.
- Ceiling: ₹20,00,000 or the amount notified.
- Payment: within 30 days of becoming payable. Delay attracts simple interest.
- Forfeiture: wholly or partly, for wilful damage, riotous conduct or an offence involving moral turpitude.
- Nomination: taken from the employee, and covering family members.
The HR desk has a gratuity calculator in Claims, and it shows the change in liability under the 50% rule.
Last reviewed 17-10-2026. General information, not legal advice for a specific case. Check the latest Act, Rules and notifications of the appropriate government before acting.