What is Gratuity ?

Gratuity is a sum of money that an employer pays an employee as a token of appreciation for their service. It is a lump-sum payment that is not made regularly. 

How is gratuity paid?

• Gratuity is paid when an employee resigns or retires 

   

• It is also paid in other situations, such as when an employee is injured and becomes disabled 

   

• The amount of gratuity is based on the employee's salary and years of service 

   

Who is eligible for gratuity? 

• An employee must have completed five or more years of service to be eligible for gratuity

• There are some exceptions for periods of absence due to strikes, lockouts, accidents, leaves, layoffs, and more

What is the Payment of Gratuity Act?

• The Payment of Gratuity Act, 1972 governs gratuity payment in India 

   

• The act covers all central and state government departments, defense, and local governing bodies 

   

• Private organizations can also come under its purview