Documentation Published & Fact-Checked 1 Sept 2026

What is the 5-year Gratuity rule and how is Gratuity calculated in India?

Verified Legal Answer • Reviewed by Hire Your Vakeel Legal Panel (Updated for 2026 / BNS & BNSS)

Under the Payment of Gratuity Act 1972, employees completing 5 continuous years of service are entitled to gratuity calculated as: (15 × Last Drawn Basic Salary × Tenor in Years) / 26 (tax-exempt up to ₹20 Lakhs).

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