Is the notice period included in the gratuity?

Yes, the notice period is included in the calculation of gratuity payable to an employee. As per the Payment of Gratuity Act, 1972, gratuity is calculated based on the completed years of continuous service rendered by the employee. The period of notice served by the employee before separation from the organisation qualifies as tenure of service for gratuity calculation.

For instance, if an employee serves 4 years and 11 months of continuous service and then serves a notice period of 1 month, the total service tenure will be considered as 5 years for gratuity. The notice period is counted towards the gratuity calculation.

Furthermore, wages paid during the notice period are also included in the definition of 'wages', which comprises basic salary and DA used for gratuity calculation. Therefore, the period of notice and payments made therein are accounted for while determining the gratuity payable to an employee.