What is Gratuity?

Created by Product Content Team, Modified on Fri, 15 Mar at 1:25 PM by Product Content Team


Gratuity is a lump sum payment given to employees upon separation from employment, either due to resignation, retirement, or death.


It is based on the duration of total service, calculated using the last drawn salary as the basis. In the event of an employee's demise, the surviving family members receive the gratuity amount.


In India, the Payment of Gratuity Act of 1972 governs this benefit, applicable to various establishments such as factories, mines, oil fields, plantations, ports, railways, motor transport undertakings, companies, shops, and more.


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