Understanding Gratuity: How to Calculate Your Payout When Resigning from a Multinational Company

I work with a multinational networking and telecommunications company. I joined on 3 May 2012. My current salary slip shows basic as 57156, and under gratuity, it shows 2749. What does the second figure mean?

If I resign on Jan 3, 2017, how much will be my gratuity payout? I would be obliged if someone could show me the calculation as well.

Hi Concern,

I had been working in a private IT company in Mumbai from 1st Jan '2011 to 23rd Dec '15. I had sent 2-3 emails regarding gratuity, but they denied my request. They mentioned that I am not eligible as per the criteria set by the state labor consultant for the specified period. They have not responded to my emails yet. Therefore, please let me know if I am eligible for gratuity or not.

For query 1 from Bangalore:

If you resign in January 2017, you would not have completed a service of 5 years, so you will not be eligible for Gratuity payout. The amount of 2749 seems to be the Company's contribution towards your Gratuity to the registered trust or Gratuity policy.

For Query 2 from Mumbai:

You have just missed the timeline of 5 years by a few days. However, the law provides for 4 years and 10 months also. You should check with the exact eligibility policy of the Company.

As per the Payment of Gratuity Act, 1972, employees become eligible for gratuity when they have completed five years of service. An employee who has worked for 240 days in a year is considered to have completed a full year. Therefore, since the employee has completed four years and 240 days, they will be eligible for gratuity, but only after completing five years, whether they work for the remaining period beyond 240 days or not.

For easy reference, I am sharing a link with detailed information on the same. There is a well-known case where an employee won a legal battle in the court of our respected Indian court. This case has now become the benchmark for the payment of gratuity across companies. Unfortunately, I do not recollect the specific case.

[Gratuity Act, Amendment, Acts, Eligibility, Abstract, benefits](http://www.helplinelaw.com/employment-criminal-and-labour/ECGI/gratuity-act-amendment-acts-eligibility-abstract-benefits.html)

I hope this information is helpful to you. This information is shared to the best of my knowledge. I recommend verifying with the relevant authorities before taking any action.

Have a pleasant day.

To all those who have mentioned 240 days, please check the definition of continuous service under the Act. For your information, 240 days is for organizations working 6 days a week. For organizations working 5 days a week, the requirement is 190 days. Almost every post mentions only 240 days. Guys, wake up!