Gratuity Process
Purpose
This process describes the gratuity calculations performed by the system during a payroll process.
Prerequisites
· You have set the configurations necessary for the functioning of Gratuity in the SAP system: You can configure the functionality using the IMG under Payroll India ® Retirement Benefits ® Gratuity.
· You have maintained employee records in the Personal IDs infotype and Gratuity for India subtype (003).
· You have configured the wage types that form the basis for gratuity contributions in the table view Processing Classes, Cumulations, and Evaluation Classes (V_512W_D). The Gratuity Basis wage type (/116) stores the gratuity basis amount.
Process Flow
While processing gratuity contributions during a payroll run, the SAP system:
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1. Checks the eligibility of the employee towards gratuity. Eligibility of the employee towards gratuity is as per the Pay Scale Groupings for Allowances.
The system also performs a check on the minimum number of years of service that the employee should have put in, to become eligible for gratuity.
The Number of Gratuity years constant (GRTYR) in the table view Payroll Constants (V_T511K), stores the value for the minimum number of years, and the system makes use of the Determine Gratuity eligibility rule (ING0) to read this constant.
You can maintain the value in the constant through the IMG under Payroll India ® Retirement Benefits ® Maintain the eligibility years for Gratuity.
2. Checks the Type of Contribution (Yearly or monthly)
The company may contribute towards Gratuity on a monthly basis, or on an annual basis. You can set the annual contribution towards gratuity to either a financial year or a calendar year.
To set the Type of Contribution, use the IMG activity under Payroll India ® Retirement Benefits ® Maintain Gratuity Frequency of Contribution and Related Wage Types.
3. Computes the gratuity amount. During computations, the system checks the table view Gratuity Details Maintenance (V_T7ING1) for the value configured, and computes gratuity accordingly.
For example, if in the table, you have maintained the gratuity contribution amount as 4.81 percentage of the gratuity basis, the system will compute 4.81 percentage of the gratuity basis, as the employer contribution towards gratuity.
Computation of the basis for gratuity depends on the Type of Contribution. If the contribution type is:
¡ Monthly – The system will compute gratuity every month, and store the amount in the Grat Contrib -monthly wage type (/3G1).
¡ Annual – The system will compute gratuity only at the end of the gratuity period. The system can compute the gratuity every month, but will take the amount into consideration only at the end of the gratuity period. The Grat Contrib - annual Wage Type (/3G2) stores the annual gratuity contributions.
If there are splits in the gratuity period, the system will create a provisional Grat Prov-split period Wage Type (/3G0), for every split and then store the sum of all the splits in the Grat Prov – sum of split wage type (/3G3).
See also: