Eligibility
Gratuity is payable when you leave the company after at least 5 years of continuous service, for example on resignation, retirement, or the end of your engagement. The 5-year requirement is waived if employment ends due to death or disablement, and a fixed-term employee qualifies after 1 year. Your work week is Monday to Friday, so a year of continuous service is 190 days. That means 4 years and 190 days counts as the 5 years. Paid leave, holidays and weekly offs all count toward the 190 days.How Gratuity Is Calculated
The statutory formula is:Gratuity = (Last drawn Basic + DA) x 15 x years of service / 26The 15/26 factor represents 15 days of wages for each completed year of service, based on a 26-day month. A part-year of more than 6 months counts as a full year, so 5 years and 7 months is calculated as 6 years, while 5 years and 2 months is calculated as 5 years. The total gratuity payout is capped at ₹20,00,000 (₹20 lakh). Example: Last drawn Basic + DA of ₹50,000 with 6 years of service:
₹50,000 x 15 x 6 / 26 = ₹1,73,077
How Omnivoo Accounts for Gratuity
Gratuity does not appear as a deduction on your payslip. Instead, Omnivoo treats it as an employer cost in two ways:- Monthly provision: Each month, Omnivoo sets aside a gratuity provision of 1.67% of your Basic + DA as part of the employer’s cost of employing you. What you’re paid at separation is always the full 15/26 amount below, however much was set aside.
- Payout at separation: If you leave after 5 years of service (4 years and 190 days is enough), the actual gratuity is calculated using the 15/26 formula above and paid out as part of your final settlement.