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 R/3 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 15/26 percentage or 4.81percentage 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.
· 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.
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.
Using this report you can generate a Gratuity list. This list details an employee wise contribution towards a gratuity trust.