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Gratuity Rule: Before changing jobs in 2026, you should definitely understand the new gratuity rules. Yes, now fixed-term and contract employees can receive gratuity even after just one year of service.  By understanding the right timing, salary structure, and rules, you can avail yourself of thousands of rupees in extra benefits. So, before changing jobs, learn about this in detail.

Understand Gratuity Before Changing Jobs
If you are planning to change jobs in 2026, then it's not just the new salary or better profile that you should consider, but also understanding and knowing about gratuity is very important. Often, employees ignore this crucial aspect while switching jobs, even though, after the new rules, gratuity is now available even after a shorter period of service. The good news is that the gratuity rules have become much more beneficial for fixed-term and contract employees. Many still ignore gratuity when changing jobs, but they shouldn't. Let's understand why it's important when changing jobs.

Now, let's understand what gratuity is.
When an employee works diligently and honestly for a company for many years, at the time of their departure, they receive not only experience but also strong financial support in the form of gratuity. Gratuity is a benefit given by the employer as a reward for the employee's work. Whether it's retirement or a decision to change jobs, this amount is deposited into your account and helps secure your future planning. In essence, gratuity is the employee's hard-earned money. Now, employees working on a fixed-term and contract basis can be entitled to gratuity even after just one year of service. This recent rule change has brought relief to millions of employees who work on project-based or contract jobs and frequently change jobs. 

When will you receive this benefit?
It's very important to know that you will only receive the benefit of one year's gratuity if the employee has worked continuously for the company for a full year.  If there has been a long break in between or excessive leave has been taken without permission, the gratuity may be withheld. Actually, the gratuity is calculated from the joining date to the last working day, so the timing of leaving the job also matters.

How to withdraw gratuity money?
Now the question arises, how is the gratuity amount calculated?  The formula is very simple, and any employee can calculate it themselves. According to the new rules, there are 26 working days in a month. The formula for calculating gratuity is: (Last Basic Salary + DA) × Years of Service × 15 ÷ 26

What will the gratuity be on a salary of Rs. 45,000-35,000?

Let's say your basic salary is Rs. 45,000 and you have completed one year in the company. According to this formula, your gratuity will be around Rs. 25,962. Similarly, if an employee's basic salary is Rs. 35,000, after one year of service, they can receive a gratuity of approximately Rs. 20,192. This is why this amount can prove to be good financial support when changing jobs.

Benefits for working more than 11 months
Another major benefit related to gratuity is that if an employee has worked for more than 11 months, in many cases, it is considered a full year. This means that even if the time is slightly less than a full year, the employee is not deprived of this benefit. This is why waiting a few weeks or months before leaving a job can sometimes be a wise decision. The most reassuring thing is that there is no tax on gratuity. 

Understand Gratuity Before Changing Jobs
So, if you are planning to change jobs in 2026, don't just look at the salary mentioned in the offer letter, but also consider your basic salary, tenure of service, and the complete gratuity calculation.  With a little information and proper timing, you can avail yourself of thousands of rupees in extra benefits.  Changing jobs can be essential for career growth, but proper planning can also strengthen your finances. (Note: This news is based on general information; for more details, please consult a financial advisor.)

Disclaimer: This content has been sourced and edited from Zee Business. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.