The year 2025 witnessed the government of India brought in the new provisions of gratuity under the Code on Social Security, which was a revolutionary step that impacted positively employee group from all sectors whether permanent employees, gig workers, and fixed-term ones. The policy changes aimed to make gratuity more inclusive, more predictable, and more easily claimable.
Gratuity Explained
An employer pays gratuity as a large amount of money to an employee as a token of appreciation for his/ her long service. The grant is customarily paid on the retirement, resignation, or death of the employee. In the past, just permanent employees with a minimum of five years’ service could claim it.
Key Transformations in 2025
The revised regulations will open up the market for fixed-term workers and gig workers as long as they comply with the minimum service period. Also, the companies are now under obligation to pay out the gratuity amount within a month following the departure of the employee, thus cutting off the period of waiting and uncertainty.
New Gratuity Rules Overview
| Feature | Old Rule | New Rule (2025) |
|---|---|---|
| Eligibility | 5+ years of continuous service | 4+ years with 240 days/year |
| Coverage | Permanent employees only | Includes fixed-term and gig workers |
| Payment Deadline | No fixed timeline | Must be paid within 30 days of exit |
| Tax Benefits | Exempt up to ₹20 lakh | Same, with clearer guidelines |
| Calculation Formula | Basic + DA × years × 15/26 | Unchanged |
Importance of This Change
The new arrangements will allow a larger pool of workers, particularly those on short-term contracts or freelancing, to access gratuity. The swift payments coupled with the clear-cut distribution of eligibility will help the employees plan their financial’s better and will turn out to be a less frequent source of complications in the courts.
Final Thoughts
The 2025 gratuity reforms are a welcome step toward fairer and faster retirement benefits. Whether you are a permanent employee or a gig worker, understanding these new rules can help you get your just dias. Check your eligibility and make sure your employer complies with the updated rules.
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