Final Settlement & Gratuity

$19.90

FINAL SETTLEMENT

“Final Settlement, the pinnacle of every organizational journey, marks a crucial phase. It’s the meticulous procedure an employer must undertake when an employee resigns or is terminated. However, this process, often intricate for HR, demands meticulous attention. It involves numerous components, from leave encashment to salary particulars and gratuity calculations.

Introducing our streamlined Final Settlement Calculation Module, meticulously crafted to simplify this intricate process. It seamlessly encompasses all elements, encompassing leave encashment, precise salary breakdowns, and gratuity computations.

Key Features:
– Accurate Gratuity Calculation following UAE Standard Laws.
– Leave Encashment based on remaining employee leave balance.
– Detailed Salary Information, inclusive of additions, deductions, and allowances.
– Final Dues meticulously computed considering both Gratuity and Leave Salary components.

With our module, navigating the complexities of final settlements becomes effortless, ensuring a smooth transition for both employers and employees.”

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HOW TO USE THIS MODULE”Final Settlement & Gratuity”

 

Before installingFinal Settlement & Gratuity, make sure hr_payroll_community and hr_employee_updation are installed.

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After installing the module in the configuration you can see a menu named Settlement Type in order to configure the settlement types.

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Settlement type can be resign or termination. Select the corresponding journal, and select the resign checkbox if settlement type is resignation, or else select the termination checkbox in case the settlement type is termination. .

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Upon installing this module, a Settlement menu will appear within the Payroll Module, allowing users to access a Settlement form. Upon selecting the employee, essential details including Department, Job Position, Address, and Joining Date will populate automatically. Users are required to indicate the type of settlement, whether it is Termination or Resignation, and provide the corresponding leaving date. Furthermore, users have the option to specify the reason for departure.

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At the top of the form, you’ll find two buttons: Generate and Gratuity Calculation. Clicking on Generate will display the employee’s basic salary and contract type details. The form has two tabs: Details and Gratuity.

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By clicking the Gratuity Calculation button, gratuity is calculated according to UAE laws based on the type of employment contract:

For Limited Contract:
– Less than one year: Employee is not entitled to any gratuity pay.
– Between 1 and 5 years of service: Employee is entitled to full gratuity pay, calculated at 21 days’ salary for each year worked.
– 5 or more years of service: Employee is entitled to full gratuity pay, calculated at 30 days’ salary for each year worked.

For Unlimited Contract:
– Less than one year: Employee is not entitled to any gratuity pay.
– Between 1 and 3 years of service: Employee is entitled to one third of the 21 days’ gratuity pay.
– Between 3 and 5 years of service: Employee is entitled to two thirds of the 21 days’ gratuity pay.
– 5 or more years of service: Employee is entitled to the full 21 days’ gratuity pay for each year of service.

Gratuity is automatically calculated based on the employee’s years of experience and the contract type, simplifying and expediting HR processes.

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Leave salary plays a crucial role in the final settlement process. If the employee has unused annual leaves, they are eligible for encashment. To calculate the leave salary, click on the “Encash Leaves” button.

1. Balance Leave: Enter the remaining leaves the employee has.
2. Per Day Annual Leave Salary: This is calculated as (basic salary + allowances) / 30 to determine the per day annual leave salary.
3. Eligible Leave Salary: The eligible leave salary is calculated as (balance leaves * per day annual leave salary).

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In the end, the Final Settlement Calculation will display the gratuity amount. The final payment is then calculated by adding the total gratuity amount to the eligible leave salary.

 

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