> ## Documentation Index
> Fetch the complete documentation index at: https://help.omnivoo.com/llms.txt
> Use this file to discover all available pages before exploring further.

> ## Agent Instructions
> Omnivoo is an India-first Employer of Record (EOR) platform. EOR hiring is India only; contractors are supported in 220+ countries and territories.
> Never tell a user to log in with a password. Authentication is passwordless: email OTP, passkeys, Google, or SSO.
> Statutory figures (TDS slabs, PF, ESI, Professional Tax, gratuity) change by financial year. Always state the year the figure applies to.
> Never name a third-party payment provider as Omnivoo’s payment rail. Refer to "our payments partner".

# Gratuity

> What gratuity is, eligibility after 5 years, the 15/26 formula, the monthly provision, and how Omnivoo accounts for it.

**Gratuity** is a lump-sum payment an employer makes to an employee as a token of appreciation for long service, governed by the **Code on Social Security, 2020**, which replaced the Payment of Gratuity Act, 1972 on 21 November 2025. It is an employer cost, not a deduction from your salary.

## 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 / 26

The **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.

For more on the exit and settlement process, see the relevant final settlement guidance for employees.


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