Gratuity in Salary
All Groups
Gratuity is a way to reward long service. If an employee completes five or more years with your company, they’re legally eligible for a one-time payout — calculated using a simple formula:
(15 / 26) × last drawn basic salary × years of service
This amount is exempt from tax up to a limit. While it’s part of the CTC, gratuity is only paid at the time of resignation, retirement, or termination. Most HR tools now track employee tenure and automatically calculate the eligible amount during offboarding.
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