Gratuity Confusion: Can You Receive It Twice After 10 Years in One Company?

Hi Friends, please solve my query. Can an employee be eligible for receiving gratuity twice upon completion of 10 years of service in a single organization?

Thank you.

Regards, Preeti

Every employee is eligible for gratuity upon completing 5 continuous years of service. It will be a one-time payment after separation, and you will not receive gratuity twice for completing 10 years.

Gratuity Calculation Formula

Please find the formula for gratuity:
((Basic + DA) * 15/26) * Number of years of service)

Hope that clarifies.
Regards,

In a simple calculation, the employee will receive 5 months of last drawn wages/salary (basic + DA) at the end of 10 years if they choose to separate. Gratuity is a one-time settlement.

Thanks,
Pon

Eligibility for Gratuity Under the Payment of Gratuity Act, 1972

Regarding your query, please refer to Section 4 of the Payment of Gratuity Act, 1972 for the eligibility criteria of an employee for gratuity. This section describes that if an employee has completed 5 years of continuous service at the time of leaving the organization due to resignation, retirement, superannuation, or any contractual agreement between the employer and employee, gratuity is payable for every completed year of service or part thereof in excess of 6 months, at a rate of 15 days of wages payable to the employee. The calculation is as follows: Last Drawn Basic + DA * 15 * Number of Years of Service divided by 26.

Regards,
V. R. RAO PULIPAKA

Eligibility for Gratuity Under the Payment of Gratuity Act

I may provide you with full information regarding this as per the Payment of Gratuity Act:

As per your case, you are eligible for receiving gratuity according to the calculation formula provided by everyone, with one point missing. In the last year of service, if you have completed six months of service, then you are eligible for gratuity for that full year. For example, if you have served 10 years and 6 months, then you are eligible for gratuity for 11 years. Similarly, if you have served 9 years and 6 months, then you are eligible for gratuity for 10 years.

I hope this explanation fully clarifies your point.

Regards,
Arun Kumar Walia

Subject: Calculation of Gratuity

I recently heard that the calculation of gratuity is being considered by the labor ministry to increase from 15 days to 21 days or so. Could you kindly clarify this for me?

Thank you for your attention to this matter.

Best regards,
Narayan K
Vil

Can an employee be eligible for receiving gratuity on completion of 4.6 years of service in a single organization?

Regards,
Amit Shetty

Every employee is eligible for gratuity on completion of 5 continuous years of service, and it will be only a one-time payment after separation. You will not receive gratuity twice for completing 10 years. Please find the formula for gratuity: ((Basic + DA) * 15/26) * Number of years of service. Hope that clarifies.

Question on Gratuity Transfer

Here is one more question: Can an individual transfer the gratuity amount from their previous company to the current company after completing 5 years?

Regards.

There must be some limit for the amount payable as gratuity. Can anyone help me with it and the conditions applicable for this?

Well, the upper limit is Rs. 10 lakh. Amounts exceeding that would attract tax, so the upper limit is already there.

Lower Limit Considerations

As far as the lower limit is concerned, it would be as per the Gratuity Act and depends on the number of years in service. So there is nothing much that companies can do.

The eligibility for gratuity is 5 years. The calculation for gratuity is based on the last drawn Basic + DA multiplied by 15, then divided by 26, and finally multiplied by the number of years of service rendered.

Regards,
Rangarajan

As per my knowledge, gratuity cannot be transferred from one employer to another. Only the PF amount can be transferred. Gratuity will be paid in a one-time settlement.

Regards,
Rangarajan

The gratuity need not be paid in the case of an employee terminated or dismissed due to his involvement in any misconduct unless the same was proven, or the employee himself accepted the misconduct.

Best Regards,
Saravanan