Gratuity is a lump-sum payment made by an employer to an employee as a token of appreciation for long service, typically provided upon retirement or resignation after a set period, governed by local laws.
- What is gratuity?
Answer: It is a lump-sum payment to an employee for long service upon retirement or resignation. - Who is eligible for gratuity?
Answer: Employees with 5+ years of continuous service are typically eligible (varies by country). - How is gratuity calculated?
Answer: It is calculated as 15 days’ salary per year of service (e.g., in India under the Payment of Gratuity Act). - Is gratuity taxable?
Answer: It may be tax-exempt up to a limit, depending on local tax laws. - What role does HR play?
Answer: HR processes gratuity claims and ensures compliance with regulations.
