Gratuity

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Overview

Gratuity – Business Overview

Gratuity is a payroll-related document in Dafater used to calculate, record, and approve the gratuity amount payable to an employee when they leave the organization. It supports businesses in meeting statutory, contractual, and policy-based obligations related to long-service benefits.

Purpose in Business Operations

The Gratuity document is used to: - Calculate employee end-of-service benefits based on company policy, labor law, or employment contracts
- Ensure accurate and consistent gratuity payouts
- Provide formal records for audits, compliance, and financial reporting
- Support transparent and fair employee exit settlements

It acts as the official reference for how much gratuity an employee is entitled to and why.

Prerequisites and Setup Requirements

Before using Gratuity, the following should be in place in Dafater: - Employee records with correct joining dates, salary details, and employment status
- Company gratuity policy defining eligibility, calculation rules, and minimum service periods
- Payroll structure that clearly identifies salary components applicable for gratuity
- Approved employee separation or exit process

Without these, gratuity calculations may be inaccurate or incomplete.

Typical Workflow and Business Process Fit

  1. Employee Separation Initiated
    An employee resigns, retires, or is terminated, and an exit process is started.

  2. Gratuity Record Created
    The HR or payroll team creates a Gratuity document for the employee.

  3. Eligibility and Service Period Review
    The system uses employment duration and policy rules to determine eligibility.

  4. Gratuity Amount Calculation
    The payable amount is calculated based on eligible salary components and years of service.

  5. Review and Approval
    The gratuity amount is reviewed by HR and management for accuracy and compliance.

  6. Settlement and Payment
    Once approved, the gratuity amount is included in the employee’s final settlement.

Key Business Scenarios Where Gratuity Is Essential

In all these scenarios, Gratuity ensures consistency, fairness, and legal compliance.

Important Considerations for Users

Summary

The Gratuity document in Dafater plays a critical role in managing employee end-of-service benefits. It ensures accurate calculations, supports compliance, and helps organizations handle employee exits professionally and transparently, protecting both the business and its employees.

Basic Information

Fields

Field Name Label Type Required Options Description
employee Employee Link ✓ Employee Employee record linked in Dafater for gratuity processing
employee_name Employee Name Data - Full name of the employee receiving gratuity
dateofjoining Date of Joining Data - Employee’s official joining date recorded in Dafater
department Department Link Department Department where employee was assigned at time of exit
nationality Nationality Data - Employee nationality for statutory gratuity eligibility
contract_type Contract type Data - Employment contract type affecting gratuity calculation
currentworkexperience Current Work Experience Float - Total years of service considered for gratuity
monthly_salary Monthly Salary Int - Last drawn monthly salary used for gratuity calculation
typeoftermination Type of Termination Select ✓ Resignation, Termination of the contract, Expir... Reason for employment termination impacting gratuity entitlement
company Company Link ✓ Company Company responsible for paying employee gratuity
posting_date Posting date Date ✓ - Date gratuity record is posted in Dafater
gratuity_rule Gratuity Rule Link ✓ Gratuity Rule Applicable gratuity policy rule in Dafater
dateofleaving Date of Leaving Data - Employee’s official last working day
designation Designation Data - Employee designation at time of leaving
reports_to Reports to Data - Direct manager overseeing the employee
nationalidoriqamano Identity or residence number Data - Employee national ID or residence number
status Status Select Draft, Unpaid, Paid, Submitted, Cancelled Current processing status of gratuity record
amended_from Amended From Link Gratuity Reference to previous gratuity record if amended
payviasalary_slip Pay via Salary Slip Check - Indicates if gratuity is paid through payroll
amount Total Amount Currency ✓ - Calculated total gratuity amount payable
paid_amount Paid Amount Currency - Actual gratuity amount already paid
payroll_date Payroll Date Date - Payroll date when gratuity is processed
salary_component Salary Component Link Salary Component Salary component used for gratuity payment
cost_center Cost Center Link Cost Center Cost center charged for gratuity expense
modeofpayment Mode of Payment Link Mode of Payment Payment method used for gratuity settlement
expense_account Expense Account Link Account Accounting expense account for gratuity
payable_account Payable Account Link Account Liability account for unpaid gratuity
extra_bonus Extra Bonus Int - Additional bonus added to gratuity amount
reasonforextra_bouns Reason for Extra Bouns Data - Justification for providing extra gratuity bonus
additional_deduction Additional Deduction Int - Extra deduction applied to gratuity amount
reasonforadditional_deduction Reason for Additional Deduction Data - Reason for additional gratuity deduction
total Total Currency - Final gratuity amount after adjustments
assetshandedover Assets handed over Select Yes, No Confirms whether company assets were returned
notifydirectmanager Notify direct manager Check - Send gratuity notification to direct manager

Permissions

Role Read Write Create Delete Submit Cancel
HR Manager ✓ ✓ ✓ ✓
HR User ✓ ✓ ✓ ✓
DocType Relationship Module
Account Links to Accounts
Company Links to Setup
Cost Center Links to Accounts
Department Links to Setup
Employee Links to Setup
Gratuity Links to Payroll
Gratuity Rule Links to Payroll
Mode of Payment Links to Accounts
Salary Component Links to Payroll