Yes, in many cases, 4 years and 7 months of service can qualify you for gratuity in India — but it is not automatically guaranteed by the statute.
Legally, gratuity becomes payable after 5 years of continuous service under the Payment of Gratuity Act, 1972. However, Indian courts have repeatedly interpreted “continuous service” in a way that allows eligibility slightly before completing a full 5 calendar years, provided certain conditions are met.
Understanding whether your case qualifies depends on days worked, not just months on the calendar.
What the law officially says (confirmed position)
Under Section 4(1) of the Payment of Gratuity Act, 1972:
An employee becomes eligible for gratuity after completing five years of continuous service, on resignation, retirement, superannuation, or death.
This requirement is unchanged and confirmed.
No government notification has reduced the statutory minimum below five years.
Where the 4 years 7–8 months interpretation comes from
The key concept: “continuous service” and 240 days
Section 2A of the Act explains that an employee is deemed to be in continuous service for a year if they have worked at least 240 days in that year (190 days for certain industries).
Several High Courts have applied this definition to the fifth year, holding that:
- If an employee has completed
4 full years + at least 240 days in the fifth year,
they should be treated as having completed five years of continuous service.
Practical implication
In most standard working patterns, 240 working days ≈ 7–8 months.
That is why 4 years 7 months (or more) is commonly treated as gratuity-eligible.
Is this interpretation officially notified?
No.
This is a judicial interpretation, not a legislative amendment.
- Multiple High Courts (including Madras and Delhi) have supported this view.
- The Supreme Court has not issued a final, binding ruling that universally settles the issue.
- As a result, eligibility at 4 years 7 months is legally defensible but not automatic.
When 4 years 7 months usually does qualify
You are likely to be eligible if all of the following apply:
- You worked in an establishment covered by the Payment of Gratuity Act
- You completed 4 years plus at least 240 working days in the fifth year
- Your service was continuous (no disqualifying breaks)
- Your employer follows court-aligned interpretations or past precedents
Most large private employers and PSUs do pay gratuity in such cases to avoid litigation risk.
When it may be denied
Gratuity may be refused if:
- Your fifth year does not cross the 240-day threshold
- Your employer applies a strict 5 calendar-year policy
- There are breaks in service that legally interrupt continuity
- You resign at, for example, 4 years 5–6 months
In such cases, courts often become the deciding authority.
Calculate Your Gratuity Amount
Use our gratuity calculator to estimate your payable gratuity based on the latest calculation method and proposed wage definition under the new labour codes.
Open Gratuity CalculatorNote: Final applicability depends on official notification of labour codes.
How gratuity calculation works once eligible
Once eligibility is established, the gratuity calculation itself is straightforward and undisputed.
Gratuity calculation formula (confirmed)
For employees covered under the Act:
Gratuity = (Last drawn Basic + DA × 15 × Completed years) ÷ 26
Important points:
- A year exceeding 6 months is rounded up to the next full year
- Less than 6 months is ignored
- Maximum gratuity is subject to the statutory ceiling (as notified)
So if you exit at 4 years 7 months, and eligibility is accepted:
- Service is rounded to 5 years for calculation purposes
This is why most gratuity calculator tools show a payout at this stage.
Why online gratuity calculators show eligibility at 4 years 7 months
Most gratuity calculator India tools assume:
- 240-day rule applies
- Court-backed interpretation is followed
- Rounding rules apply after eligibility
These calculators are decision-support tools, not legal guarantees.
They are accurate only if your service satisfies the continuous-service test.
What you should do if you are at 4 years 7 months
- Count actual working days, not calendar months
- Check if your organization has paid gratuity in similar past cases
- Use a gratuity calculator only after confirming eligibility
- If denied, request the employer’s written basis
- Legal recourse is available if the 240-day condition is met
Bottom line
- Law (confirmed): 5 years of continuous service required
- Court interpretation: 4 years + 240 days can qualify
- 4 years 7 months: Often eligible, but not universally automatic
- Gratuity calculation: Clear and settled once eligibility is accepted
If you are evaluating resignation timing, crossing the 240-day mark in the fifth year is the real milestone — not the calendar anniversary.