How many years of service are needed for gratuity?▾
Five years of continuous service, except on death or disablement where the five-year condition does not apply.
Why divide by 26?▾
The Act treats a month as 26 working days, so 15 days' wages equals 15/26 of monthly salary.
Is 7 years 7 months counted as 8 years?▾
Yes, for employers covered by the Act, any service over six months in the final year is rounded up to a full year.
Is gratuity taxable?▾
Gratuity up to ₹20 lakh is exempt for private-sector employees; anything above is taxed as salary. Government employees' gratuity is fully exempt.
Does gratuity form part of CTC?▾
Many employers show gratuity at 4.81% of basic in CTC. It is paid only when you leave after qualifying service, so it is not part of monthly in-hand pay.
