-
Under the Payment of Gratuity Act, 1972 (India), an employee is eligible to receive gratuity only after completing 5 continuous years of service with the same employer. This means that if you resign or leave the company before 5 years, the employer is not legally obligated to pay gratuity.
-
Using a Gratuity Calculator Before 5 Years
Even if you havenโt completed 5 years, you can still use gratuity calculator to estimate what your gratuity would be if you completed 5 years or more. This is helpful for:-
Planning your finances in advance
-
Comparing job offers
-
Understanding long-term benefits
-
-
Company-Specific Policies
Some private companies may offer gratuity or similar end-of-service benefits even for employees with less than 5 years of service. In such cases, the gratuity calculator can be used to estimate the amount based on company rules, which may differ from the statutory formula. -
Importance of Continuous Service
The calculation also depends on continuous service. Breaks in employment may affect eligibility. For example:-
A gap of resignation and rejoining might reset the 5-year clock
-
Leaves or sabbaticals usually do not affect it if they are sanctioned
-
-
Summary
-
Before 5 years: Legal gratuity = 0 (statutory)
-
Using a calculator: Only for estimation, planning, or company-specific benefits
-
After 5 years: Eligible for statutory gratuity
