Labour Laws and Practice · Social Security Legislations

Gratuity and Maternity Benefit under the Code on Social Security

Updated 11 October 2026 · Fact-checked

Gratuity is a lump sum paid by the employer on exit, normally after five years of continuous service, at 15 days' wages for each completed year. Maternity benefit is paid leave at the average daily wage, for up to 26 weeks, if the woman has worked at least 80 days in the 12 months before expected delivery.

Understand Gratuity and Maternity Benefit

Both benefits are employer-funded social security under the Code on Social Security, 2020. They protect a worker at two points: when service ends, and when a woman is away from work for childbirth.

Gratuity is a reward for long service. It is paid when employment ends, usually by superannuation, retirement, resignation, death or disablement. The core test is continuous service. The usual period is five years. That condition is relaxed for death or disablement. Fixed-term employees get it pro rata, so check the rules or the question for the minimum period. The amount is a number of days' wages for each completed year of service.

Maternity benefit under section 60 is a right of every woman and a liability of her employer. It is paid at the average daily wage for the period of actual absence, before and after delivery. The average daily wage is the average of wages payable for the days she worked in the three calendar months before she goes on leave, subject to the minimum rate of wage under the Code on Wages, 2019.

The woman must have actually worked for at least 80 days in the 12 months before the expected delivery date. Days of lay-off and paid holidays under any law count towards the 80 days.

The Code also covers adoption, commissioning mothers, miscarriage, tubectomy and illness arising from pregnancy. Learn each as a rule with a number: weeks, days, or one month.

Key rules to remember

Gratuity (monthly-rated employee): Gratuity = (15 ÷ 26) × last drawn wages (monthly) × completed years of service; Years: a part of a year above six months counts as a full year. Wages for gratuity are basic, dearness allowance and retaining allowance, if any. The divisor 26 is the standard working-day convention. Apply any ceiling the question gives.
Gratuity eligibility: Continuous service ≥ 5 years on superannuation, retirement or resignation; Not required on death or disablement. Fixed-term employees get gratuity pro rata. Do not assume a ceiling figure; use the one given in the question.
Average daily wage (s.60): Average daily wage = wages payable for days worked in the 3 calendar months before absence ÷ number of days worked; Subject to the minimum rate of wage under the Code on Wages, 2019.
Qualifying service (s.60(2)): Actual work ≥ 80 days in the 12 months before expected delivery; Lay-off days and paid holidays count.
Maximum period (s.60(3)): 26 weeks (not more than 8 before expected delivery); 12 weeks (not more than 6 before) if two or more surviving children; 'Child' includes a stillborn child.
Adoption and commissioning mother (s.60(4)): 12 weeks from the date the child is handed over; Adopted child must be below three months of age.
Leave under s.65: Miscarriage or MTP: 6 weeks; tubectomy: 2 weeks; illness from pregnancy etc.: up to 1 month extra; Paid at the rate of maternity benefit, on proof prescribed by the Central Government.

How to solve Gratuity and Maternity Benefit questions

Use the same sequence for any problem or case question: rule, facts, conclusion.

1Identify whether the question is on gratuity or maternity benefit, or both.
2State the governing rule from the Code in plain words, with the section number only if you are sure of it (for example s.60 or s.65 for maternity).
3Test eligibility: five years' continuous service for gratuity, or 80 days' work in 12 months for maternity benefit. Note any exceptions, such as death or disablement.
4Fix the period or years: round service years using the six-month rule, or work out the weeks allowed and the pre-delivery limit.
5Compute the amount: use the gratuity formula, or the average daily wage multiplied by the days of absence.
6Check the provisos: two or more surviving children, death of the woman or the child, adoption, or the ceiling.
7Write a one-line conclusion and, if relevant, a compliance point: the employer's liability, the insurance requirement for gratuity under s.57, and the prescribed proof.

Quickest way: Two-line check before calculating

When to use it: Use when time is short and the question is short-answer or numerical.

Gratuity: confirm 5 years (or death or disablement), round the years, then compute 15/26 × wages × years.
Maternity: confirm 80 days, count the children, then pick 26 or 12 weeks, check the pre-delivery cap, and multiply the days by the daily wage.

Common mistakes in Gratuity and Maternity Benefit

Rounding service years wrongly, for example treating 8 years 4 months as 9 years.
Students remember 'part of a year counts' but forget that it must exceed six months.
Fix: Round up only if the extra period is more than six months; otherwise drop it.
Denying gratuity on death because the employee had under five years of service.
The five-year rule is learned without its exceptions.
Fix: Always state the exception for death or disablement.
Using 15 × wages or 30 days instead of 15/26 for a monthly-rated employee.
Confusion between 'days' and the monthly wage.
Fix: Write the formula first, then insert the figures.
Giving 26 weeks to a woman with two surviving children.
Students recall only the general limit.
Fix: Count surviving children first. Two or more means 12 weeks, of which at most 6 weeks precede delivery.
Counting only 80 working days and ignoring lay-off and paid holidays.
The word 'actually worked' is read too literally.
Fix: Remember the explanation to s.60(2): lay-off days and paid holidays are included.
Using the last month's wage for the maternity daily rate.
Confusion with the gratuity basis of last drawn wages.
Fix: Maternity uses the average over the three calendar months before absence, divided by days worked.

Worked examples

Example 1

Rohan Mehta works for a Pune company at ₹52,000 per month (basic plus dearness allowance). He resigns after 8 years and 8 months of continuous service. Calculate his gratuity, assuming no ceiling applies.

Show the solution

Eligibility: continuous service exceeds 5 years, so gratuity is payable on resignation.
Years: 8 years 8 months. The extra 8 months exceed six months, so count 9 years.
Per-year amount: 15 ÷ 26 × ₹52,000 = 15 × ₹2,000 = ₹30,000.
Total: ₹30,000 × 9 = ₹2,70,000.

Answer: Gratuity payable is ₹2,70,000.

Example 2

Anita Nair has two surviving children and is expecting a third. In the three months before her leave she was paid ₹1,56,000 for 78 days worked. She has worked 95 days in the previous 12 months. State her entitlement and benefit for the maximum period, counting every calendar day of absence.

Show the solution

Qualifying service: 95 days is at least 80 days, so she is eligible under s.60(2).
Period: with two or more surviving children, the maximum is 12 weeks, of which not more than 6 weeks may precede expected delivery (s.60(3), first proviso).
Average daily wage: ₹1,56,000 ÷ 78 = ₹2,000, assuming this is not below the minimum rate of wage.
Days: 12 weeks × 7 = 84 days.
Benefit: 84 × ₹2,000 = ₹1,68,000.

Answer: She is entitled to 12 weeks, with at most 6 before delivery, and a maternity benefit of ₹1,68,000.

Exam tips

Quote the numbers exactly: 80 days, 26 weeks, 8 weeks, 12 weeks, 6 weeks, 2 weeks and one month. Examiners look for them.
In case questions, write the rule, apply the facts, then conclude. Do not skip the conclusion line.
For gratuity numericals, show the formula, the rounding of years and the final figure on separate lines.
Use the given ceiling or wage definition from the question, and do not import figures from memory.
Mention the compliance points: the employer is liable for maternity benefit, the prescribed proof is needed for s.65 leave, and gratuity liability must be insured (s.57).

Practice questions from Social Security Legislations

Gratuity and Maternity Benefit in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Gratuity and Maternity Benefit: frequently asked questions

Who is eligible for gratuity under the Code on Social Security, 2020?

An employee who completes five years of continuous service and leaves by superannuation, retirement or resignation. The five-year condition does not apply on death or disablement. Fixed-term employees get gratuity pro rata.

How is gratuity calculated under the Code?

For a monthly-rated employee, gratuity is 15 ÷ 26 × last drawn wages × completed years of service. A part of a year above six months is counted as a full year. Apply any ceiling notified by the Central Government.

How many weeks of maternity benefit does the Code give?

Up to 26 weeks, of which not more than 8 weeks precede the expected delivery. A woman with two or more surviving children gets 12 weeks, of which not more than 6 weeks precede delivery.

What is the service condition for maternity benefit?

She must have actually worked in the employer's establishment for at least 80 days in the 12 months before the expected delivery date. Lay-off days and paid holidays are counted.

Is there leave for miscarriage under the Code?

Yes. Section 65 gives six weeks' leave with wages at the maternity benefit rate after a miscarriage or medical termination of pregnancy, on the prescribed proof. Tubectomy gives two weeks.