ERPNext's Gratuity module calculates and provisions statutory gratuity payable to employees on separation after a minimum qualifying period under the Payment of Gratuity Act, 1972.

ERPNext HR & Payroll

What is Gratuity?

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Gratuity: ERPNext's Gratuity module calculates and provisions statutory gratuity payable to employees on separation after a minimum qualifying period under the Payment of Gratuity Act, 1972.

Configuring Gratuity Rules

Go to Payroll → Gratuity Rule → New. Set the formula (typically Last Basic Salary × 15/26 × Years of Service). Link to a Salary Component for provisional monthly accrual. Set the qualifying years (usually 5 years of continuous service).

Processing Gratuity on Separation

When an employee leaves, create a Gratuity record under HR → Gratuity. ERPNext calculates the amount based on the rule, last drawn basic salary, and service period. The payment posts to the gratuity payable account and the expense account.

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