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It is a lump sum payment made to the employees based on the duration of their total service. The gratuity benefit is payable on termination of employment by taking the last drawn salary as the basis for the calculation. However, in case of unfortunate demise of the employee, his/her family members are given the sum amount. It is basically a form of gratitude provided to the employees in monetary terms for the services rendered by them to the organization and is an important form of social security benefit.