Employee benefits
Who is eligible for gratuity?
You are normally eligible for gratuity after five years of continuous service with the same employer. A fixed-term employee becomes eligible after one year under the Code on Social Security. The five-year condition does not apply when employment ends because of death or disablement. Whether 4 years and 240 days counts as five years depends on the court and state, so check before relying on it.
In short
- Five years of continuous service, normally.
- One year for fixed-term employees.
- No minimum on death or disablement.
- 4 years and 240 days: not settled everywhere; check your state.
How many years of service are needed for gratuity?
Five years of continuous service for most employees. Since the Code on Social Security came into force on 21 November 2025, a fixed-term employee becomes eligible after one year.
Is 4 years and 7 months eligible for gratuity?
It depends, and it is not settled everywhere. A part-year over six months counts as a full year when gratuity is worked out, but whether that rounding helps you qualify is a separate question. Some courts have treated four years plus 240 days of work in the fifth year as meeting the five-year condition; others have not. Check the position in your state before counting on it.
When does the five-year rule not apply?
When employment ends because of death or disablement. In those cases gratuity is payable regardless of the length of service, to the employee or their nominee.
Are contract and part-time workers eligible?
Eligibility follows the law’s definition of employee, not the job title. Fixed-term employees qualify after one year. Workers engaged through a contractor are generally the contractor’s employees; their gratuity sits with the contractor.
Frequently asked questions
How many years for gratuity eligibility?
Five years of continuous service normally, or one year for a fixed-term employee.
Is gratuity paid before 5 years?
Yes for fixed-term employees after one year, and in cases of death or disablement.
Is 4 years 240 days eligible for gratuity?
Some courts have accepted it as five years and others have not. Check the position in your state.
What happens when you talk to us
A 20-minute video call with a Growth Advisor. No obligation, and no quote pushed. It opens with a five-minute video from our founder on how the benefits stack works and why Ethika exists; the rest is your questions. You’ll leave with an honest read on your current cover and claims experience, and a straight answer on whether we can genuinely help, even if you never become a client.
20 minutes with a Growth Advisor. No obligation.
A note on this page. Everything here is general information, not legal or tax advice, and nothing is an offer. Gratuity rules are as understood at the review date under the Code on Social Security, 2020, in force from 21 November 2025, and state positions can differ. For advice about your situation, talk to us.