Five years of service is not necessary to receive gratuity! Every employee should know these rules
Gratuity is a one-time payment given in recognition of your continuous service and is covered under the Payment of Gratuity Act, 1972. Learn further about the circumstances under which you may be eligible for early gratuity.
Employed people often believe that at least five years of service is necessary to receive gratuity. However, the truth is not so simple. There are many situations where employees are fully eligible for gratuity even without completing five years.
Generally, five years of continuous service is required for gratuity. However, if your company follows a five-day workweek, you can become eligible as early as four years and 190 days. For a six-day workweek, this threshold is four years and 240 days.
If an employee dies while on the job, or becomes permanently disabled due to a serious accident/illness, gratuity is paid immediately.
There is no need to wait for five years. This rule is designed to ensure that families are not faced with financial hardship and receive their entitlements immediately.
After the Social Security Code 2020 comes into effect (from November 21, 2025), fixed-term and contract employees will be eligible for gratuity after just one year of service.
Previously, they had to wait five years, like other employees. Now, they will receive the same formula and the same protections even for a shorter period.
The Working Journalists Act, 1955, provides journalists with special protections. While other employees require five years, journalists can claim gratuity after just three years of continuous service. This provision provides them with additional protection given the uncertainties and pressures of their work.