Gratuity

Purpose

This component is used to process employee gratuity.

Gratuity is a statutory benefit provided by an employer on cessation of employee services. In the SAP

system, you can configure the payment of Gratuity as per one of the following methods:

Payment of Gratuity Act, 1972 Where the minimum amount that you need to contribute towards

gratuity is 4.81 percentage of the monthly basis salary of the employee.

Company policy When the company policy provides gratuity benefits that are better than the

benefits provided as per the Gratuity Act.

Gratuity is generally applicable to employees who have been in service for a minimum stipulated period.

The employer regularly contributes towards a gratuity trust, to provide for payment at the time of

cessation of services. Gratuity received by an employee is taxable partially.

Integration

Payroll Process Employee gratuity is computed by the system as a part of the regular payroll

process.

Income Tax As gratuity is taxable partially.

Termination Workbench This functionality computes the gratuity payable to an employee at the

time of cessation of employment.

Features

1. Personal IDs infotype (0185), Gratuity for India subtype (03)

In this subtype, you maintain the employee Identification Number for Gratuity, and the name of the

trust, to which you are contributing for employee gratuity.

2. Gratuity Listing report (HINCGRY0)

Using this report you can generate a Gratuity list . This list details an employee wise contribution

towards a gratuity trust.

See also:

SAP Business Suite SAP ERP SAP ERP 6.0

Gratuity Definition

Gratuity Process

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