Gratuity Rules in India
Gratuity is a financial reward provided by an employer to an employee for rendering continuous service for 5 years or more.
- The 4 Years, 240 Days Trick: Under a Madras High Court ruling, an employee who has completed 4 years and 240 days (in a 6-day workweek) or 190 days (in a 5-day workweek) is considered to have completed 5 years for gratuity eligibility. However, employers often dispute this, so completing full 5 years is safest.
- Rounding Up: If you work for 6 years and 7 months, your tenure is counted as 7 years for the calculation. If you work for 6 years and 5 months, it is counted as 6 years.