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Creating Gratuity Pay Head in Tally.ERP 9

Creating Gratuity Pay Head for India

To create the Pay Head for Gratuity computation,

Go to Gateway of Tally > Payroll Info. > Pay Head > Create

  1. Enter the Name of the Pay Head

  1. Select Gratuity from the List of Pay Head Types

  2. Enter the Slab Rate details for Gratuity Calculation in the sub-screen as shown:


[Img-57]

  1. Select Provisions as Group from the List of Groups in the field Under

  2. Set Set Alter Income Details to Yes

  3. In the Income Tax Details screen,

  4. Income Tax Component is defaulted to Gratuity while creating the Gratuity Pay Head

  • Tax Calculation Basis is defaulted to On Actual Value as Gratuity is paid only while leaving the organisation or retiring


[Img-58]

  1. Deduct TDS Across Period(s) is defaulted to No as the tax has to be deducted in the same month when Gratuity is paid

  2. Select the Rounding Method from the list if applicable


[Img-59]

  1. Accept to save the Pay Head

Note: To use the Earning Pay Head for Gratuity calculation, set Use for Gratuity? field to Yes in the ledger creation screen (for Pay Heads such as Basic Salary, DA, and so on, created under Indirect Expenses).

Creating Gratuity Pay Head for UAE

An employment contract in the United Arab Emirates (UAE) may either be for a limited or unlimited period.

According to the Federal Law of the UAE, an employee, to be entitled to receive gratuity should have completed one year of continuous service irrespective of the contract type i.e., limited or unlimited.

Tally.ERP 9 now supports calculation of gratuity as per the prescribed rules and regulations of UAE.

To compute gratuity depending on the employment contract type, it is essential that two gratuity pay heads - one for limited contract and another for unlimited contract employee is created in a UAE Payroll enabled company.

Note: Since an individual can be employed under either of the two contracts (limited & unlimited, only one pay head out of the two should be defined in the Salary Details of an employee.  

Gratuity for the contract type - Limited

To create a gratuity pay head for a limited contract,

Go to Gateway of Tally > Payroll Info. > Pay Head > Create

  1. Enter the Name of the Pay Head

  2. Select Gratuity from the List of Pay Head Types

  3. Enter the Slab Rate details for Gratuity Calculation in the sub-screen as shown:


[Img-60]

  • Select Provisions/Current Liabilities as Group from the List of Groups in the field Under

  • Select the Rounding Method from the list, if applicable


[Img-61]

  1. Accept to save the Pay Head

Gratuity for the contract type - Unlimited

To create a gratuity pay head for an unlimited contract,

Go to Gateway of Tally > Payroll Info. > Pay Head > Create

  1. Enter the Name of the Pay Head

  2. Select Gratuity from the List of Pay Head Types

  3. Enter the Slab Rate details for Gratuity Calculation in the sub-screen as shown:


[Img-62]

  • Select Provisions/Current Liabilities as Group from the List of Groups in the field Under

  • Select the Rounding Method from the list, if applicable


[Img-63]

  1. Accept to save the Pay Head

Note: Ensure that the Employer Unique ID is entered in the F11: Statutory & Taxation features screen

On including the gratuity pay head in the salary details for an employee, the computation of gratuity can be viewed in the Gratuity Summary report.

 
 
 
 
Tally.ERP 9 Reference Manual LIBRARY
1.
Installation of Tally.ERP9
2.
Site Licensing of Tally.ERP9
3.
Shortcut Keys in Tally.ERP9
4.
Maintaining Company Data
5.
Creating Masters
5a. Accounts Information [Creating Masters]
5b. Inventory Information [Creating Masters]
6.
Voucher Entry
7.
Reports in Tally.ERP9
8.
Excise for Dealer
9.
Excise for Manufacturer
10.
Reports [ Excise for Manufacturer]
11.
Excise for Importer
12.
Service Tax in Tally.ERP9
13.
Tax Collected at Source (TCS) in Tally.ERP9
14.
Tax Deducted at Source (TDS) in Tally.ERP9
15.
Value Added Tax (VAT) in Tally.ERP9
16.
Central Sales Tax (CST) in Tally.ERP9
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
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