Gratuity Calculation - how many years shall be calculated for gratuity, whether 5.5 years or 5.8?

Hi Anybody, One of our employees's service was completed 5.5 years after that, he was admitted to hospital for ESI leave now he is unable to work continue, due to his health condition. Now, the point is how many years shall be calculated for gratuity, whether 5.5 years or 5.8 if 5.8 years, to calculate 6 years or 5 years only? Kindly suggest anybody

For calculations, the years are rounded of! Even if it is 5.5 or 5.8, for calculations they will be rounded off to 6 years!

Dear Professional
Greetinings
Key points to remember for Gratuity Calculation
Minimum 5 years required:
To be eligible for gratuity, an employee needs to have completed at least 5 years of service with the company.
Rounding off:
If you have worked for a period exceeding 5 years but not reaching 6 years (like 5 years and 11 months), it will be rounded down to 5 years for gratuity calculation.

Dear Member,

Plz see that if this employee had worked for five years continuously & in the sixth year if he has worked for more than six months then in that case he eligible to have gratuity from the employer for six years.

Regards,
R N KHOLA.

Generally, for the purpose of calculation of gratuity, any part period over and above six months to be considered as one year. Accordingly, if the employee has served for 5.5 years, it should be calculated as 6 years as per the Act. For the purpose of eligibility for gratuity payment, one should have put in 5 years of continuous service in the organization.

As per Sec.4 (2) of the Act, For every completed year of service or part thereof in excess of six months shall pay gratuity to an employee at the rate of fifteen days of wages based on the rate of wages last drawn by the employee concerned.

For this purpose, the term continuous service is defined under Sec.2 A of the Act.

Regards,

In this scenario, gratuity is calculated based on the completed years of service, as defined under the Payment of Gratuity Act, 1972. Here's how you can calculate:

Key Points to Consider:
Continuous Service:

Any period where the employee is absent due to illness (such as ESI leave) is still considered as continuous service, as long as the employment relationship has not been terminated.
Gratuity Calculation Rule:

Gratuity is calculated based on completed years of service, and any fraction of a year greater than 6 months (i.e., 0.5 or more) is rounded up to the next full year.
For fractions less than 6 months, the service is rounded down to the last completed year.
In Your Case:
Service Duration:

5.5 years + 3 months of ESI leave = 5.8 years (total service period).
Rounding Rule:

Since 5.8 years > 5.5 years, it is rounded up to 6 years.
Final Gratuity Period:

The employee's gratuity should be calculated for 6 years.
Legal Reference:
Under Section 2A of the Payment of Gratuity Act, the following is considered as continuous service:

Absence due to sickness, accident, or medical leave where the employee has not been terminated or resigned.
Final Suggestion:
You should calculate the gratuity for 6 years, as the total service (5.8 years) qualifies for rounding up to the next full year.

5.5 yrs ? Pl.ensure it's not "5 yrs & 5 months" but 5 yrs & 6 months. Continuous service during this period is important aspect. If so, 5yrs+6 months will be counted as 6 yrs.