In Tally.ERP 9, you can create pay heads for gratuity computation for India and the UAE.
Creating Gratuity Pay Head for India
Creating Gratuity Pay Head for UAE
To create the Pay Head for Gratuity computation
1. Go to Gateway of Tally > Payroll Info. > Pay Head > Create.
2. Enter the Name of the pay head.
3. Select Gratuity from the List of Pay Head Types.
4. Enter the Slab Rate details for Gratuity Calculation in the sub-screen:
5. Select Provisions as Group from the List of Groups, in the field Under.
6. Enable the option Set Alter Income Details. The Income Tax Details screen appears.
7. By default, the Income Tax Component is set to Gratuity.
8. By default, Tax Calculation Basis is set to On Actual Value because Gratuity is paid only when the employee leaves the organisation or retires.
9. By default, Deduct TDS Across Period(s) is set to No because tax must be deducted in the same month.
10. Select the Rounding Method from the list if applicable.
11. Press Enter to save.
Note: To use the Earning Pay Head for Gratuity calculation, set the Use for Gratuity? field to Yes in the Ledger Creation screen (for pay heads such as Basic Salary, and DA, which are classified as Indirect Expenses).
An employment contract in the United Arab Emirates (UAE) could be for a limited or an unlimited period.
According to the Federal Law of the UAE, an employee is entitled to receive gratuity after completion of one year of continuous service, irrespective of the contract type, which could be limited or unlimited.
Tally.ERP 9 now supports calculation of gratuity as per the prescribed rules and regulations of the UAE.
To compute gratuity in a UAE Payroll enabled company, you must create two gratuity pay heads - one for a limited contract and another for unlimited contract employee. .
Note: Because an individual can be employed under either of the two contracts (limited & unlimited), use only one of these pay headsin the Salary Details of an employee.
To create a gratuity pay head for a limited contract
1. Go to Gateway of Tally > Payroll Info. > Pay Head > Create.
2. Enter the Name of the pay head.
3. Select Gratuity from the List of Pay Head Types.
4. Enter the Slab Rate details for Gratuity Calculation in the sub-screen.
5. Select Provisions/Current Liabilities as Group from the List of Groups in the field Under.
6. Select the Rounding Method from the list, if applicable.
7. Press Enter to save.
To create a gratuity pay head for an unlimited contract
1. Go to Gateway of Tally > Payroll Info. > Pay Head > Create.
2. Enter the Name of the pay head.
3. Select Gratuity from the List of Pay Head Types.
4. Enter the Slab Rate details for Gratuity Calculation in the sub-screen.
5. Select Provisions/Current Liabilities as Group from the List of Groups, in the field Under.
6. Select the Rounding Method from the list, if applicable.
7. Press Enter to save.
Note: Ensure that the Employer Unique ID is entered in the F11: Statutory & Taxation features screen.
After you add the gratuity pay head in the salary details of an employee, you can review the computation of gratuity using the Gratuity Summary report.
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