Money basics3 min read · Updated 21 October 2026
Gratuity after 1 year: who qualifies under the new Labour Codes
The Labour Codes came into force on 21 November 2025. See who gets gratuity after one year, who still needs five, and how the 50% wage rule can raise your payout.
What changed
Gratuity used to need 5 years of continuous service for almost everyone. Under the new codes, fixed-term employees qualify after 1 year, as long as they complete at least 240 days in that year.
If you are permanent
Permanent staff are still reported to need 5 years. The formula is unchanged: last basic plus DA × 15/26 × years.
The 50% wage rule
The codes say wages (basic, DA and similar) should be at least 50% of your total pay. If your employer had kept basic low, resetting it higher raises your gratuity, PF and take-home changes. Look at your next payslip.
When it must be paid
Employers are expected to pay within 30 days of it becoming due, or interest is payable. Ask HR in writing if it is late.
Common questions
Do I get gratuity after 1 year?
Only if you are a fixed-term employee. Permanent employees generally still need 5 years.
What is the 240-day rule?
A year of service counts if you worked at least 240 days in it.
Does the formula change?
No. It is still last basic plus DA × 15/26 × years.