Personnel>>Personnel>>Transactions>>Gratuity
Contract Gratuity
Gratuity is a lump-sum payment provided to contract employees at the end of their employment term, often as a form of appreciation or reward for service. It is typically calculated as a percentage of the employee’s basic salary, based on the length of the contract or tenure with the organization. Gratuity is commonly seen in contracts as a benefit to retain employees until the end of their contract and may be structured differently depending on company policies or country-specific labour laws.
Employee Contract Gratuity is paid as Other Income, based on a Percentage or set Cash value and allows the user to validate, then post the record to a selected Pay Year and Cycle.
How does it work?
There are several steps to set up an employee's contract gratuity as outlined below.
Step 1: Set up Transaction-Payroll Link
Personnel>>Personnel>>Transactions>>Transactions-Payroll Linkages>>Transaction Linkages
Step 2: Set up Contract Gratuity
Please also see How do I set up employee Contract Details?
Personnel>>Personnel>>Employees>>[Select Employee]>>Contract>>Gratuity Setup
- Has Gratuity?: Select 'Yes' if the contract has a gratuity to be paid.
-
Gratuity Option: Select whether the gratuity is to be paid as a percentage, cash or an advanced.
- If Percentage is selected -
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Gratuity is % of: Select the Pay Type for the gratuity.
- Pay Rate: The amount paid per unit of work, such as an hourly wage or annual salary.
- Salary: The fixed regular payment made to an employee.
- Straight Time: The hourly wage paid to non-salaried employees based on the actual hours worked.
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Gratuity is % of: Select the Pay Type for the gratuity.
- If Advanced is selected, click Advanced Setup hyperlink:
- Period Start: Enter the start date for the advanced gratuity.
- Period End: Enter the end date for the advanced gratuity.
- Pay Year: Enter the Year the gratuity would be paid in.
- Pay Cycle: Enter the Pay Cycle the gratuity would be paid in.
- Gratuity Option: Select whether the advance payment is a Percentage or Cash value.
- Gratuity % or $ Amount?: Enter the gratuity Percentage or Cash value.
- Comments: Enter comments about the gratuity.
- If Percentage is selected -
- Gratuity % or $ Amount?: Enter the percentage or cash value of the gratuity.
Step 3: Enter Gratuity Transaction
Personnel>>Personnel>>Transactions>>Gratuity
Company: Select the company of the employee being paid gratuity.
Pay Group/Name: Select the Pay Group the employee belongs to.
Badge Number/First Name/Last Name: Select the employee being paid the gratuity.
Contract Id: Select the Contract for which the gratuity is being paid.
Year Applied To: Enter the Year the gratuity is being paid in.
Cycle Applied To: Enter the Pay Cycle the gratuity is being paid in.
Contract From/To: The dates for the selected contract auto-fills and cannot be updated.
Gratuity Option: Percentage or cash will be auto-selected based on the selection in the gratuity setup.
Gratuity Amount: Enter the value of the gratuity based on the selected Gratuity Option.
Step 4: Post Gratuity
Step 5: Process Gratuity Payment in the Payroll
Payroll>>Process Payroll>>Cycle Changes>>[Select Group]>>[Select Pay Year]>>[Select Cycle No]
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