Understanding Gratuity Eligibility: How Do Breaks in Service Affect Your Benefits?

Suppose the employee is on the company's rolls until the date of resignation. In that case, the total period from the date of joining to the date of leaving will be considered for service to calculate gratuity. If there is any break between them, the break period will not be considered for service in the calculation of gratuity. Once you have completed five years of continuous service in the company (without any break in service), you are eligible for gratuity.

Gratuity Calculation: Last salary drawn (PF deductible salary, Basic + DA + special allowance) / 26 days * 15 days (for every completed year of service, 15 days of salary will be calculated as gratuity, and if the service is more than six months, then one year will be added in service) * number of years of service (after 5 years of continuous service).

Hi, As per Section 2A of the Gratuity Act, in the event the employee is absent from duty due to sickness, accident, leave, or absence from duty without leave, he/she would be entitled to the benefit of gratuity unless the employer has passed an order treating such absence without leave as a break in service in accordance with the Standing Orders of Employment applicable to the employee. Also, if an employee goes on a long leave (sabbatical) with the consent of the employer and resumes work after completion of the period of leave, he or she would be deemed to be in 'continuous service' for the purpose of payment of gratuity.