Gratuity payment under labour codes


What is the update on gratuity calculation and payment for different types of employees under the new labour codes?


No five-year restriction will be there. For every completed year, Gratuity will have to be paid.
Thank you.

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Gratuity has to be paid for 15 days of salary once completed 5 years of service of every one year completed on 26 days.

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Hi Namita,

Gratuity Laws will be governed by the Code on Social Security, 2020.

The provisions of Gratuity will be covered under the Code on Social Security. Under this
Social Security Code, the provisions of Gratuity remains the same except for a few add-ons

  • Gratuity is payable on the termination of the contract period under fixed-term
    employment. The employer shall pay gratuity on a pro-rata basis and not on the basis
    of continuous service of five years.
  • The amount of gratuity payable to an employee shall not exceed such amount as may
    be notified by the Central Government (20 lac threshold will be removed).
  • The working journalist’s gratuity threshold period gets reduced from five to three years.

For more information, you can refer to The Code on Social Security, 2020 (

Hope the above helps.

Bhuvana Anand

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