Full and Final Settlement Process

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The Open HRMS Gratuity Settlement module handles employee settlements during the resignation process. Usually, the gratuity is paid at the time of retirement, but it can be paid before retirement based on certain conditions. An employee is eligible to receive gratuity only if he has completed a minimum of five years of service in the company. The gratuity can be paid before the completion of five years in certain cases, like the death of an employee or becoming disabled due to an accident or disease.

The Manager can create gratuity settlements of employees during their resignation. The settlement amount is calculated based on a predefined equation. A gratuity settlement can be created only when the resignation request of the employee is approved. The settlement reason should be mentioned to create settlements other than gratuity.

Gratuity Settlement Configuration

Create gratuity settlement configurations, which will be applied on creating the gratuity settlements. We can add certain rules in the configuration which helps in the calculation of gratuity amount.

Salary Details

The gratuity amount is calculated from the last drawn salary of the employee. The last drawn salary is taken from the recent payslip of the employee.

Calculation of Gratuity Amount

The gratuity amount is calculated on the basis of a predefined formula. The formula is as follows: (15 * last drawn salary * period of working) divided by 26. The last drawn salary is the last month's salary(Basic salary + Dearness allowance). The Total Years Worked should be at least 1 year to create the gratuity settlement.


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