What is the due period of gratuity?

As per the Payment of Gratuity Act, the employer then has to determine the gratuity amount and issue a notice to the employee and controlling authority specifying the amount within 30 days from the date of separation. The employer should also disburse the actual gratuity payment to the eligible employee within these 30 days.

If the employer fails to pay the gratuity amount within the due period, they are liable to pay simple interest in addition to the gratuity. This interest is calculated from the due date until the actual payment date at the rate notified by the Central Government for long-term deposits.

However, such interest is not payable if the payment delay is due to the employee's fault and the employer has obtained appropriate permission from the controlling authority. This defined due period ensures the employee receives their rightful gratuity within 30 days of becoming eligible.