Payment of Gratuity Act: Who Qualifies and What You Get
Learn if you are eligible for a lump sum payment after years of service and how the calculation works under this act.
The Payment of Gratuity Act provides a way for employees to receive a lump sum payment as a reward for their long-term service with an employer.
Who it's for
This scheme is for employees who have completed at least five years of continuous service with the same employer.
What you get
You receive a lump sum payment when you retire or resign from your position. This payment serves as a financial benefit for your years of loyalty to the company.
What it costs you
The amount you receive is based on your length of service. The calculation is roughly equivalent to 15 days of your last drawn salary for every year you have worked.
The catch to know
It is vital that the amount is calculated correctly. Errors in these calculations can lead to formal labor disputes between the employer and the employee.
How to apply
- Check your total years of continuous service to ensure you meet the minimum requirement.
- Confirm your last drawn salary to estimate your total benefit.
- Contact your employer's HR or payroll department to initiate the claim process.
- Follow your company's internal procedure for submitting a formal request for the payment.