Gratuity is a lump sum payment made by an employer to an employee as a reward for long-term service, usually at the time of retirement, resignation, or termination.
Gratuity is a statutory benefit provided under the Payment of Gratuity Act, 1972 to employees who have completed at least 5 years of continuous service with an organization. It acts as a financial reward and support after employment ends.
Gratuity = (Last Drawn Salary × 15 × Years of Service) ÷ 26
Where:
"If an employee’s last salary is ₹50,000 and they worked for 10 years: Gratuity ≈ ₹2.88 lakh (approx.)"