Gratuity Eligibility: Does Serving a Notice Period Count Towards 5 Years?

Hi, I know any person is eligible for gratuity only when he has completed 5 continuous years in an organization. Now, my query is if anyone is resigning from his company after completing 4 years and 10 months, and his notice period is 2 months, then if he is serving the notice period and his 5 years will be completed only while considering those 2 months of the notice period, will he be eligible for gratuity? Please advise!! -Gaurav

Hi Gaurav,

Yes, he will be eligible for gratuity as he has completed 5 years of service. When calculating his gratuity, 5 years are considered from his date of joining the company until the date he finally left.

Regards,
Jyoti Negi

Hello Gaurav,

If an employee has completed his 4 years and 240 days, he is eligible to get gratuity. Please find the attached judgment of the Madras High Court.

Regards,
Parvez Pasta
PSL Ltd.

Dear Gaurav,

He will be eligible for gratuity after completion of 5 years of service.

Thanks,
J.S. Malik

Hi Gourav,

If any employee completes 5 years of continuous service, they are eligible to receive gratuity as per the law. However, recent changes in the act have modified the eligibility criteria to include those who have completed 4 years and 240 days of service in the organization (including layoff, leave with wages, sick leave). Such employees are highly eligible to receive gratuity.

Dear Seniors,

Please kindly clarify my doubts on the gratuity issue.

- Date of joining means the actual date of joining or the date after completion of the probation period?
- Is 240 days taken for eligibility after deducting leaves?
- What is the formula for gratuity?
- Is there any upper limit for the benefit amount?

Thanks in advance.

Regards,
Anil

Dear Anil,

Please find the answers to your queries highlighted in blue color.

- Date of joining means the actual date of joining or the date after the completion of the probation period? - Actual Date of joining

- Is 240 days taken for eligibility after deducting leaves? - With Leave

- What is the formula for Gratuity? - Wages/26 * 15 * year of service

- Is there any upper limit for the benefit amount? - No upper limit, but 3,50,000 is tax-free, and above that limit is taxable.

Dear Seniors,

Please kindly clarify my doubts on the gratuity issue.

- Date of joining means the actual date of joining or after the completion of the probation period date?

- Is 240 days taken for eligibility after deducting leaves?

- What is the formula for Gratuity?

- Is there any upper limit for the benefit amount?

Thanks in advance.

Regards,
Anil