IndiaMy gratuity payment was denied after 5 years of service. Is this right?
No, gratuity cannot be denied after 5 years of service — it is mandatory under the Payment of Gratuity Act, 1972, provided the employee has completed at least 5 years of continuous service.
What the Law Says
The Payment of Gratuity Act, 1972 governs gratuity entitlement for employees in India. It applies to establishments with 10 or more employees and mandates payment upon termination of employment after qualifying service.
An employee becomes eligible for gratuity if they have rendered 'continuous service' for not less than five years. This includes service interrupted by sickness, accident, leave, lay-off, strike, or lock-out — as long as it’s not due to the employee’s fault.
Gratuity is calculated at the rate of fifteen days’ wages for every completed year of service, based on the last drawn wages. The maximum amount payable is ₹20 lakh (as amended in 2017), and it is fully tax-exempt up to that limit.
The employer must pay gratuity within 30 days of it becoming payable. If delayed, simple interest at a rate notified by the Central Government applies — currently 8% per annum — from the due date until payment.
Statutory TextEvery employee who has rendered continuous service for not less than five years shall be entitled to receive gratuity…
— Payment of Gratuity Act, 1972, s. 4(1) — Payment of gratuity
Statutory TextThe gratuity payable to an employee shall be at the rate of fifteen days’ wages for every completed year of service…
— Payment of Gratuity Act, 1972, s. 4(2) — Calculation of gratuity
Statutory TextThe employer shall pay the gratuity within thirty days from the date it becomes payable.
— Payment of Gratuity Act, 1972, s. 7(3) — Time limit for payment
What to Do
Check your appointment letter, salary slips, and service records to confirm 5+ years of continuous service.
Write a formal written application to your employer requesting gratuity, quoting Section 4 of the Payment of Gratuity Act, 1972.
If no response within 30 days, file an application with the Controlling Authority (Assistant Labour Commissioner) under Section 8 of the Act.
Attach proof of employment, resignation/retirement letter, wage slips, and your gratuity calculation.
You may also approach the Labour Court or file a complaint online via the e-Shram portal or the Ministry of Labour’s ‘Shram Suvidha’ platform.
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.