Gratuity Eligibility Confusion: Does the 5-Year Rule Start from Joining or Confirmation Date?

Dear All,

Please let us know, the calculation of Gratuity eligibility i.e. 5 years is from the date of joining or from the date of confirmation. Because one employee has joined and was in probation for six months and then he was confirmed thereafter. Now he has completed five years from the date of joining and is still yet to complete five years from the date of confirmation. Now he has resigned and is claiming his Gratuity payable. Please suggest what the law/rules state for the eligibility criteria.

Expecting your valuable suggestions.

Regards,
Gopal Kumar

There is a Gratuity Act of 1972, which states that 5 years of service are essential to be eligible for gratuity. Below is the formula for calculating gratuity:

Gratuity Calculation Formula

Basic + DA X 15 X Number of Years of Service / 26

The maximum limit for gratuity payment is Rs. 100,000.

The eligibility of gratuity is taken into account from the date of joining the organization and not from the date of confirmation.

Regards,
Eswararao Ivaturi.