How to Claim Gratuity After Resignation: Eligibility, Process and Calculation

Step 1: Confirm your qualifying service

Review your joining date, last working day and employment records to establish your period of continuous service. If you have worked across different roles or locations within the same organisation, ask HR to confirm the service period used for gratuity calculation.

Step 2: Submit a written gratuity application

Send a written application to your employer or HR department. Use the prescribed form applicable to your establishment and the current rules. Form I has traditionally been used for an employee’s gratuity application under the Payment of Gratuity Rules; confirm the applicable form with your employer under the current framework.

Include the details requested, such as your name, employee identification, dates of employment, contact details and payment information. Keep a copy of the application and proof of submission.

Step 3: Provide supporting documents

Your employer may ask for documents to verify your employment and payment details. These may include:

• Resignation acceptance or relieving letter.
• Employee identification and employment details.
• Salary records or the latest wage details.
• Bank account information.
• Any other documents required under the applicable process.

Provide only the documents that are relevant and requested through the employer’s official process.

Step 4: Check the gratuity calculation

The employer should determine the gratuity payable using the applicable wage definition and qualifying service period. Review the calculation and ask HR for a breakdown if the amount differs from your estimate.

Step 5: Track payment

Keep a record of your application, any acknowledgement, the calculated amount and the payment date. If the employer does not provide an update, follow up in writing and refer to the statutory payment timeline.

Under Section 56 of the Code on Social Security, 2020, the employer must generally arrange payment of gratuity within 30 days from the date it becomes payable.

The employer is required to determine the amount and give written notice of the amount determined to the person entitled to receive it and to the competent authority. This obligation applies whether or not the employee has submitted an application.

If the employer fails to pay within the prescribed period, simple interest may be payable for the delay under the applicable provisions. An exception applies where the delay is due to the employee’s fault and the employer has obtained the required written permission from the competent authority.

The 30-day payment timeline should not be confused with the time allowed to submit a claim. If you have not applied promptly, submit your written claim as soon as possible and seek guidance on the applicable rules.

For eligible employees covered by the standard formula, gratuity is generally calculated using the applicable wages last drawn, the qualifying service period and the statutory rate.

The conventional formula for employees covered by the 15-days’-wages method is:

Gratuity = (Wages last drawn × 15 ÷ 26) × Qualifying years of service

The calculation is subject to the applicable law, wage definition and statutory maximum limit.

Under the labour-code framework, the definition of wages used for gratuity calculation changed with effect from 21 November 2025. As a result, the relevant wage figure should not automatically be assumed to mean only basic salary plus dearness allowance. The employer must apply the statutory definition and relevant exclusions or inclusions.

Example of a gratuity calculation

Suppose an eligible employee has the following illustrative details:

Using the conventional formula:

Gratuity = (Rs. 40,000 × 15 ÷ 26) × 6

Illustrative gratuity = approximately Rs. 1,38,462

This is only an illustration. The actual amount may differ depending on the legally applicable wage figure, qualifying service, statutory limit and the circumstances of employment.

How is the service period counted?

The period used for calculation must follow the applicable statutory rules. Under the traditional 15-days’-wages method, a completed year of service and a part exceeding six months are generally treated according to the applicable rounding rule.

For example, the treatment of six years and eight months may differ from six years and four months. Do not round your service period independently without checking the rule applicable to your employment and the relevant period.

Gratuity is subject to the maximum amount notified by the Central Government under the applicable legal framework. The amount payable to an individual may also be affected by the wage figure, qualifying service and the statutory calculation.

Older online guidance may refer to a Rs. 10 lakh ceiling. Do not rely on that figure without checking the current applicable notification and rules. An employer’s policy may provide a more favourable benefit where legally permitted, but any amount beyond the statutory entitlement should not be assumed to be mandatory.

An employer may dispute eligibility or the amount calculated, but a claim should be assessed under the applicable law rather than rejected without a valid basis.

If your employer refuses payment:

1. Ask for the reason in writing.
2. Check your employment records and qualifying service period.
3. Request a written breakdown of the gratuity calculation.
4. Keep copies of your resignation, relieving letter, salary records and claim correspondence.
5. If the issue remains unresolved, approach the competent authority responsible for gratuity matters under the applicable legal framework.

A disagreement over the amount or eligibility may be referred to the competent authority for determination under the applicable provisions.

If your employer does not pay gratuity within the prescribed period, take the following steps:

• Send a written follow-up: Refer to the date of your original claim, your last working day and any calculation already shared.
• Request the payment status: Ask whether the claim is pending verification, calculation or approval, and request an expected payment date.
• Preserve evidence: Retain copies of your application, employer responses, wage records and employment documents.
• Seek help from the competent authority: If the employer does not resolve the matter, contact the relevant labour department or competent authority for guidance on filing a claim or dispute.
• Ask about interest: Where payment is delayed, check whether interest is payable under the applicable law and whether any statutory exception applies.

Use official government or labour-department channels for a formal complaint. The correct authority and process may depend on the establishment and the applicable jurisdiction.

Gratuity tax treatment depends on the employee’s category, the nature of the payment and the applicable income-tax provisions. The amount received and the amount exempt from tax are not necessarily the same.

If you receive gratuity after resignation, check the relevant tax rules for your circumstances and the tax year in which the payment is received. For an individual case, consider consulting a qualified tax professional or referring to the Income Tax Department’s current guidance.

Gratuity can form an important part of an employee’s financial settlement after leaving a job. Before resigning, check your qualifying service period and understand the calculation method applicable to your employment. Submit a written claim, retain supporting records and review the employer’s calculation carefully.

The employer must generally arrange payment within 30 days from the date gratuity becomes payable. If the claim is disputed or payment is delayed, follow up in writing and seek guidance from the relevant competent authority. As the labour-code framework changed in November 2025, use current official guidance rather than relying solely on older gratuity limits, forms or wage definitions.