Employer Gratuity Applicability

Our company established in the year 2019 November, we haven’t applied for Gratuity yet. What is the applicability for employer. For maximum how many years we need to apply for Gratuity is there any rule like that.


Hi @KKAssociates ,

The Payment of Gratuity Act, 1972 is applicable to establishments where ten or more employees are employed, either directly or through a contractor, on any day in the preceding 12 months. As your company was established in November 2019, and assuming you have had ten or more employees since then, the Act would be applicable to your company.

Regarding the maximum number of years for which you need to apply for gratuity, the Act states that an employee becomes eligible for gratuity after completing a minimum of five years of continuous service with the same employer. This means that once an employee completes five years of service, they are entitled to receive gratuity.

It’s important to note that the Payment of Gratuity Act is a statutory requirement, and employers are obligated to provide gratuity to eligible employees. It is advisable to consult with a legal professional or an expert in employment laws to ensure compliance with the specific rules and regulations applicable to your jurisdiction and industry. They will be able to provide you with accurate guidance based on the details of your company and the prevailing laws in your region.


Thanks, Gowri, for this message, its helpfully to us also.