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Gratuity not paid when you left your job

Gratuity is now governed by the Code on Social Security, 2020. Here's who is eligible, how it is worked out, the 30-day payment rule and where unpaid gratuity is claimed.

Reviewed by AnjaliUpdated 6 min readRules vary by state ↓

In short

  • The Payment of Gratuity Act, 1972 was repealed when the Code on Social Security, 2020 came into force on 21 November 2025. Gratuity is now in Chapter V of the Code.
  • Most employees qualify after five years of continuous service. Fixed-term employees qualify after one year under the contract.
  • Gratuity is usually 15 days' wages for each completed year of service, based on your last wages, up to a ceiling the central government notifies.
  • The employer must pay within 30 days of the gratuity becoming payable, or pay interest.
  • Disputes go to the competent authority appointed by the government.

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    Practises civil and consumer law

    Reviewed this guide for accuracy against the sources listed below.

02What the law says

Chapter V of the Code applies to every factory, mine, oilfield, plantation, port and railway company, and to every shop or establishment with ten or more employees. Gratuity is payable when employment ends after at least five years of continuous service: on retirement, resignation, death, or disablement from accident or disease. The five-year requirement doesn't apply on death or disablement, or when a fixed-term contract ends. Under the Social Security (Central) Rules, 2026, a fixed-term employee becomes eligible after at least one year of service under the contract. Working journalists qualify after three years.

The amount is 15 days' wages for every completed year of service, plus any part of a year over six months, at the rate of wages last drawn. For monthly-paid employees, 15 days' wages means monthly wages ÷ 26 × 15. Fixed-term employees get gratuity in proportion to their service. The Code caps gratuity at an amount the central government notifies. An award, agreement or contract can give you better terms. Gratuity can be forfeited, fully or partly, only in limited cases, such as loss caused to the employer's property or termination for violent conduct or an offence involving moral turpitude.

When gratuity becomes payable, the employer must work out the amount and tell the employee and the competent authority in writing. It must pay within 30 days. If it doesn't, it has to pay simple interest from the due date, at a rate the central government notifies. If the amount or eligibility is disputed, the employer must deposit the amount it admits with the competent authority, which decides the dispute.

The forms and timelines described below come from the Social Security (Central) Rules, 2026. Where a state government is the "appropriate government" for an employer, its own rules apply, and the competent authority is appointed by that government, so details can differ by state.

Your state

State-specific notes for this guide are coming soon. Rules differ by state, so check with your state's official authority.

03Where you can go

  1. Your employer, in writing. Gratuity is applied for in the form the applicable rules set (Form IV under the Central Rules).
  2. Competent authority. The officer appointed by the government to decide gratuity disputes for your area, usually through the labour department.
  3. Appellate authority. An appeal against the competent authority's order goes to the government or the authority it names.
  4. Your nominee or legal heirs can claim if the employee has died.

04How it usually works

  1. 01

    After the last working day, the employee applies to the employer in writing. Under the Central Rules, this is ordinarily within 30 days of gratuity becoming payable.

  2. 02

    Under the Central Rules, the employer issues a notice within 15 days saying how much it will pay and when, or why it is refusing.

  3. 03

    The employer pays within 30 days of gratuity becoming payable.

  4. 04

    If it doesn't pay, pays less, or refuses, an application can be made to the competent authority. Under the Central Rules this is within 180 days, with extra time possible for sufficient cause.

  5. 05

    The competent authority hears both sides and decides the amount. Under the Central Rules, it aims to decide within six months.

  6. 06

    Either side can appeal within 60 days. An employer must deposit the amount ordered before its appeal is admitted.

05Time limits

  • 30 days: for the employer to pay after gratuity becomes payable (Section 56(3)).
  • 15 days: for the employer to respond to your application (Central Rules).
  • 180 days: to apply to the competent authority (Central Rules). Late applications can be accepted for sufficient cause.
  • 60 days: to appeal the competent authority's order, which can be extended by another 60 days.

06Documents to gather

  • Appointment letter and any fixed-term contract
  • Proof of your joining date and last working day: relieving letter, service certificate or emails
  • Last payslips showing basic pay and allowances
  • Your gratuity application and any reply from the employer
  • Nomination form, if a family member is claiming
  • Full-and-final settlement statement

07Common questions

The Code requires five years of continuous service for most employees. How service is counted, and whether a period close to five years qualifies, can depend on the facts and on court rulings. An advocate or the competent authority can confirm this for a particular case.

Fixed-term employees qualify after one year under the contract and are paid in proportion to their service. Workers supplied through a contractor are a separate situation, and liability depends on the arrangement.

The Code says the central government notifies the ceiling. Your employer can pay more under a contract or policy. The current notified figure can be checked with the labour department or an advocate.

The Code allows forfeiture only to the extent of the damage or loss caused, or in some cases of misconduct. A disputed forfeiture can be raised with the competent authority.

08Questions to ask an advocate

If you speak to an advocate, these questions can help make the conversation useful.

  • Does my period of service count as "continuous service" under the Code?
  • Has my gratuity been calculated on the right wages, given the Code's definition of wages?
  • Which government is the "appropriate government" for my employer, and so which competent authority do I approach?
  • Can I claim interest for the delay, and from what date?

09Sources

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This guide is general legal information for India, not legal advice. Laws and procedures change and can differ by state. For advice on your situation, speak to a qualified advocate.

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