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Gratuity settlement and interest
30-Apr-2025 (In Labour & Service Law)
If the employer is delaying gratuity disbursal, how much interest is he liable to pay on the total amount ?
If gratuity payment is delayed beyond 30 days, Indian law mandates simple interest on the total amount. The specific interest rate isn't fixed in the Payment of Gratuity Act but is notified by the Central Government. To know the exact rate, refer to government notifications or consult a labour law advocate.
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Adv. Nidhi Mathur
Delhi | 50+ Answers
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If an employer delays the disbursal of gratuity, they are liable to pay interest on the gratuity amount as per Section 7(3A) of the Payment of Gratuity Act, 1972. The interest rate is the same as specified by the central government for long-term government securities, currently around 8% per annum, but it may vary. This interest is payable from the due date of gratuity until the actual payment date.
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Adv. Ashutosh Singh Rana
Delhi | 25+ Answers
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Yes if the employer delays in payment of gratuity, the interest payable is 10% from the date the amount became due to the date of payment. This rate is fixed by the government itself. Happy to help regarding the issue.
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Adv. Nishtha Agarwal
Delhi | 25+ Answers
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