Monthly Gratuity Accrual
The application calculates the accrual of gratuity on a monthly basis.
The amount calculated is the amount that an employee would be entitled to, if they were terminated at the end of that month and if they were eligible for payment. The monthly gratuity accrual calculation is done through the Employee Gratuity Accrual Initiator element. The application keeps a record of the total accrued amount and the incremented accrued amount (periodic difference).
Manually attach the Employee Gratuity Accrual Initiator element to employees for whom a monthly gratuity accrual is required.
- Date of Termination: he current pay period end date is taken as the date of termination.
- Length of service: All types of paid leave are considered to calculate the length of service. Unpaid leave isn't included.
- Base Salary: The base salary for gratuity payment is calculated through the salary formula selected at the legal employer level.
- Termination Type: The calculation assumes the termination type as not Dismissal. And the employee is entitled to the full amount.
- Probation: If the employee is hired on or after 6th January 2005 and has not completed three months of service then gratuity payment isn't calculated.
- Entitlement: Entitlement is same as the Gratuity EntitlementGratuity Entitlement mentioned in the preceding section.
- Maximum Limit: There is no maximum limit for the gratuity payment.
From 1st March 2024 private sector employers are now able to calculate and pay monthly gratuity contributions to the Social Insurance Organization for non-Bahraini / non-GCC employees working in the private sector, as the requirement to pay gratuity on termination ends for these employees on 29th February 2024.
Additional calculation value definitions, elements, and balances have been added to manage the new component Employer Gratuity Social Insurance.
The social insurance formula is updated to calculate gratuity social insurance based on a contributory salary with no maximum limit.
The following rules are also taken into account:
- If the employees salary increases during the year, contributions will be calculated on the new contributory salary
-
If the employees salary decreases during the year, contributions will be calculated on the original, higher, contributory salary
To pay any outstanding gratuity amount to current employees, for the period of service up to 29th February 2024, add the element Gratuity Contributions Payment Initiator to element entries for the affected employees. The existing formula will be used to calculate the amount, or it can be entered directly at element entry level. It will be the shown in the calculation results as Gratuity Contributions Payment element.