Gratuity Compliance Checklist
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Gratuity Compliance Checklist
Applicability and Eligibility
Calculation
Nominations and Notices
Payment and Disbursement
Funding and Financial Reporting
Everything you need to know
01What Is the Gratuity Compliance Checklist?
This checklist covers the employer obligations set out under the Payment of Gratuity Act, which entitles staff to a lump sum after five years of continuous service. It walks you through eligibility screening, the standard 15 days of wages per completed year formula, the current payout ceiling, nomination records, and the 30-day payment window. Use it to confirm every departing employee receives the correct amount on time.
02Why Use a Gratuity Compliance Checklist
Gratuity errors are expensive and easy to make: a missed nomination form, a miscalculated tenure, or a late payout can trigger interest, penalties, and disputes at the controlling authority. A structured checklist gives HR and payroll a shared reference so calculations stay consistent across exits, resignations, retirements, and deaths in service. It also creates an audit trail that protects the company during inspections and employee grievances.
03How to Use This Gratuity Compliance Checklist
Work through it whenever an employee approaches five years of service or files an exit. Verify continuous service records, confirm the last drawn basic plus dearness allowance, and apply the 15 days formula against the statutory ceiling. Check that Form F nominations are on file, calculate the amount, and release payment within 30 days of it becoming due. Tick each item and keep the completed sheet with the employee file.
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