Understanding Gratuity: How to Calculate Eligibility and Amount After 5 Years of Service

Gratuity Eligibility and Calculation

The tenure for eligibility to receive gratuity is 5 years. One year of completion is equal to 240 days worked out of 365 days. This calculation includes paid weekly offs, paid holidays, and approved earned leaves. Additionally, one month is equal to 26 working days.

Gratuity Calculation Formula

The formula for calculating gratuity is:
((Basic + DA) * 15 / 26) * Number of completed years.

Regards

Gratuity Eligibility and Calculation

The tenure for eligibility to receive gratuity is 5 years. One year of completion is equal to 240 days worked out of 365 days, including paid weekly offs, paid holidays, and approved earned leaves. Additionally, one month is equal to 26 working days.

The formula for calculating gratuity is: ((Basic + DA) * 15 / 26) * Number of completed years.

Madras High Court Judgment

Refer to the Madras High Court judgment [Mettur Beardshel]; it states that 4 years and 240 days in the last year make workers eligible for gratuity, not only 5 full years.

Special Conditions for Gratuity Eligibility

If you are disabled (partial/permanent), you do not need to qualify for the 5-year rule. The same applies to matters of death. It also includes the legal strike period, lockout, and legal layoff period, which are not due to the employee's fault.

In gratuity, we consider 26 days for 1 month of work. It's not that 1 month has a 26-day working period; that's not the logic. In other statutes, we consider 30 days.