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If your workplace has ten or more employees and you have completed five years of continuous service, gratuity is a statutory right under the Payment of Gratuity Act: 15 days' last-drawn basic-plus-DA for every completed year (six months or more counts as a year), up to ₹20 lakh, payable within 30 days of your leaving, with interest after that. Death or disability removes the five-year condition. It cannot be waived by contract, cannot be withheld for notice-period disputes, and can be forfeited only for proven misconduct involving loss, violence or moral turpitude, after a formal process. Courts have accepted four years and 240 days as five years.
If your workplace has ten or more employees and you have completed five years of continuous service, gratuity is a statutory right under the Payment of Gratuity Act: 15 days' last-drawn basic-plus-DA for every completed year (six months or more counts as a year), up to ₹20 lakh, payable within 30 days of your leaving, with interest after that. Death or disability removes the five-year condition.
It cannot be waived by contract, cannot be withheld for notice-period disputes, and can be forfeited only for proven misconduct involving loss, violence or moral turpitude, after a formal process. Courts have accepted four years and 240 days as five years.
A nurse in a private hospital in Pathanamthitta resigns after six years and is told 'we do not give gratuity to those who resign'. That is simply wrong. Gratuity is payable on resignation, retirement, death or disability alike. The hospital owes her 15/26 of her last monthly basic-plus-DA, times six.
The Payment of Gratuity Act, 1972 covers factories, mines, plantations, ports, railways, shops and establishments with ten or more employees on any day in the preceding 12 months, and once covered, stays covered. Formula for monthly-rated employees: last drawn basic plus dearness allowance × 15/26 × completed years. Ceiling: ₹20 lakh (the tax exemption under Section 10(10) matches it; government employees have a higher ceiling).
Employer must determine and notify the amount within 30 days of it becoming payable, and pay within that period; delay carries simple interest at the notified rate. Disputes go to the Controlling Authority under the Act (in Kerala, the Assistant Labour Officer / Deputy Labour Commissioner for the area), with appeal to the Appellate Authority.
Madras and other High Courts have held that 240 days of work in the fifth year satisfies the five-year requirement; the Supreme Court has treated continuous service similarly. Employers must also compulsorily insure or fund gratuity for establishments covered by the 2024 labour codes when notified; until then the obligation stands regardless of funding.
Headcount at your workplace in the last 12 months (ten or more triggers the Act) Your date of joining and date of leaving; break-ups for maternity, sickness or lay-off count as service Last drawn basic and DA (not gross); if your employer kept basic artificially low, the dispute is about that Whether an application in Form I was given within 30 days of leaving (late applications are still maintainable with reasons) Any forfeiture notice and the process behind it
Signing a full-and-final settlement that says 'no further claims'. Gratuity is a statutory right; such a clause does not defeat it, but it slows you down. Also: not applying in writing. Form I to the employer starts the clock.
Hospitals, schools, supermarkets and plantations in Kerala are all covered. Plantation workers and teachers in unaided schools have fought and won gratuity cases repeatedly; the Act applies to them. For Gulf employment there is a separate end-of-service regime (Work 4).
Basic + DA ₹22,000, six completed years: 22,000 × 15/26 × 6 = ₹76,154. Basic + DA ₹60,000, 22 years: 60,000 × 15/26 × 22 = ₹7,61,538. Both tax-free within the ₹20 lakh ceiling.
Establishments with fewer than ten employees are outside the Act, though a contract or a state rule may still provide gratuity. Contract workers claim from the contractor, with the principal employer liable in default. Genuine misconduct, proven in a domestic enquiry, can forfeit gratuity to the extent of the loss caused.
Submit Form I to the employer within 30 days of leaving; keep proof No payment in 30 days: file Form N with the Controlling Authority under the Act Claim interest for the delay; ask for it specifically
I worked twelve years in the Gulf. What end-of-service money am I owed? I left my job years ago. Is my EPF still earning interest?
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Payment of Gratuity Act, 1972, Sections 1, 4, 7, 8; Section 10(10) Income-tax Act · Kerala Labour Department notifications of Controlling Authorities · Your appointment letter, payslips and relieving letter Last checked: 22 August 2026. Rates, limits and whether you may qualify change. Confirm with the official source before you act. Ask Kerala Rising: Use only general, non-identifying facts.
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This page is general orientation, not personal insurance, investment, medical, legal, lending, tax, employment, or professional advice. Rules, rates, deadlines, and decisions can change. Confirm the current position with the named official source and use a licensed or qualified professional where your situation requires one. Kerala Rising does not decide whether you may qualify, approve claims, or promise an outcome.