A business example
An employee resigns and notices an annual gratuity cost in an old offer letter.
Service facts
Assemble joining, exit and relevant continuity records.
Entitlement assessment
Check the applicable statutory or contractual conditions and calculation basis.
Settlement
Record the assessed entitlement and the basis for payment or any difference.
What this shows
The offer's cost figure is not automatically the exit payment. Entitlement depends on the relevant facts and governing terms.
What it is often confused with
A provision in the books, an amount in CTC and an actual payable entitlement are different things.
What to look at in your business
Review service dates, employment category and the legal basis used for the calculation.
Context and further reading
This entry explains the business term. The related guide below provides the next layer of context; any applicable legal test depends on the transaction and relevant period.
Kosha.Services · Updated 2 October 2026