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Gratuity is a one-time payment given in recognition of your continuous service and is governed by the Payment of Gratuity Act, 1972.  Read on to learn about the situations in which you may be eligible for gratuity even before completing the standard service period.

Often, employees believe that a minimum of 5 years of service is required to receive gratuity. However, the reality is not that simple. There are several situations where employees become fully eligible for gratuity even without completing 5 years of service.

Generally, 5 years of continuous service is considered necessary for gratuity. However, if your company follows a 5-day workweek, you become eligible after 4 years and 190 days. For a 6-day workweek, this limit is 4 years and 240 days.

If an employee dies during their employment, or becomes permanently disabled due to a serious accident or illness, the gratuity is paid immediately. There is no waiting period of 5 years in such cases. This rule is in place to prevent the family from facing financial hardship and to ensure they receive their rightful entitlement promptly.

After the implementation of the Social Security Code 2020 (from November 21, 2025), fixed-term and contract employees will become eligible for gratuity after only 1 year of service. Previously, they had to wait 5 years like other employees. Now, they will receive the same formula and protection even with a shorter tenure.

The Working Journalists Act, 1955, provides special protection to journalists. While other employees require 5 years of service, journalists can claim gratuity after completing only 3 years of continuous service. This rule provides them with additional security, considering the uncertainties and pressures of their profession.

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