Are employees not covered under the Gratuity Act eligible for gratuity ? Yes, employees not covered by the Gratuity Act may still receive gratuity , calculated using: Gratuity = Average salary (basic + DA) x ½ x Number of years of service. Gratuity is a token of appreciation, a way of showing gratitude for an employee's long-term commitment. In India, it is governed by the Payment of Gratuity Act of 1972. This legislation specifies when an employee is entitled to gratuity , how it is calculated, and the responsibility of employers to ensure timely disbursement. What is gratuity ? Gratuity in India : Gratuity is a lump-sum payment made by an employer to an employee as a token of appreciation for their long-term service. Governed by the Payment of Gratuity Act , 1972, it applies to employees in both the private and public sectors who meet certain eligibility criteria. Gratuity Calculator : Use ClearTax online gratuity calculator to know gratuity amount of money you will get on retirement. Only those employees who have been employed by the company for five years or more are given the gratuity . Check out gratuity formula, percentage, eligibility , rules in India.
