Gratuity Payment Dilemma: Should We Round Off to Six Years or Stick to Five?

When an employee has completed five years of continuous service with an organization, and in the sixth year, he worked for 7 months and 10 days only, as per the rules of the Gratuity Payment Act, should we round off to six years or calculate for five years?

For any calculation regarding final settlement, we have to consider only the completed year, and rounding off will not be accepted. However, for the benefit of the ex-employee, if your rules permit, the Government will not object to your company paying any additional payment, ex-gratia, monetary benefits, or gifts.

With warm regards,

S. Bhaskar

As per the Payment of Gratuity Act, 6 months and above are rounded off to one year. For your example, you need to calculate for 6 years.

Regards,
BHAVAN