People who work in private or government jobs get gratuity. It is a reward from the employer for working many years. In India, the Payment of Gratuity Act, 1972 says companies with 10 or more workers must pay gratuity. To get gratuity, a worker must work at least five years in the same company. If a person leaves the job before five years, they do not get gratuity.

Employees can calculate their gratuity, according to a simple formula. The last salary is the basic salary + DA. If an employee has worked for 6 months or more, then it is considered one year.

Gratuity Amount = (15 × Last Salary × Years of Service ÷ 26

For example, if a person has worked for 8 years, with the last salary being ₹20,000, then the gratuity will be:
(15 × 20,000 × 8) ÷ 26 = ₹92,307.69

When is Gratuity Paid?

Gratuity is paid by the company when the employee leaves the job or retire.

Gratuity provides financial security, and demonstrate recognition of the employee’s hard work and loyalty. The employees can also find the exact amount on online gratuities calculator. The gratuity must be paid by the company on time, and the employees must claim it without delay.