Gratuity Provision

[Former Member]

Hi All,

In current scenario our finance department calculate the gratuity provision of all employees on Excel and  enter it into the finance through voucher but now they want that gratuity Provision Should be hit directly to GL without entering it manually is it possible and if yes how ?

[jayantvenkata]

Hello

Kindly check the customizing in v_t7ing5, which will contain the gratuity provision wagetype /3G3.

The wage type used to calculate the provisional monthly gratuity contributions, in case the contribution to the trust is made annually.

This wage type needs to be defined only if provisional wage types per month needs to be calculated and posted to a provisional account.

This wage type stores the total amount that an employee contributes gratuity contribution amount. This amount is the sum of amount from all the provisional wage types, irrespective of gratuity ID splits. The Calculation of Gratuity contribution (INGRY) function generates this wage type while calculating the annual gratuity contribution.

You can configure this wagetype to the GL account used for gratuity provision , and have the posting done. Before doing that, kindly check on the logic used for the gratuity provision, as is being currently done .

Gratuity Calculation/Contribution is depends upon the % which you configure in the customizing tables(V_t7ing*).

Thanks and Kind Regards

Ramana

[Former Member]

HI,

Thanks for your quick reply

Actually our company not paying anything to any trust the gratuity amount will be paid to the employee at the time he resigns

[Former Member]

The first step would be to understand how the gratuity provision is calculated from your Accounts team. Once this is clear, you can map the calculation process in SAP.

[Former Member]

HI Tania

Here is the calculation for gratuity provision

1st gratuity due after 1 year of service

2nd gratuity due after 1.5 year of service

3rd gratuity due after 2.5 year of service

4th gratuity due after 3.5 year of service  so on

gratuity is equal to the current gross salary of Employee * by no of years of gratuity

e.g gross salary is 50000 and he worked 2.5 years so total gratuity provision for that employee will be (50000 * 3)= 150,000.

[Former Member]

Ok. I'd suggest you go with Jayanti's solution which is standard SAP. Just verify that the calculation requirement is satisfied.

[Former Member]

Hi Tania,

Actually our company not paying anything to any trust the gratuity amount will be paid to the employee at the time he resigns so thats why Jayanti's solution does not work in this situation .