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How to calculate gratuity in Saudi Arabia

Calculate Gratuity in Saudi Arabia


End of Service Gratuity is a gain charge for personnel when they renounce from their work or while their job settlement ends.

There are two kinds of Contracts: Limited and Unlimited Contract.

If the worker has the Contract Start and End dates set in their profile, then the worker is stated to get an quit of service fee based on the limited contract calculations. If the worker doesn’t have the Contract Start and End dates set of their profile, then the machine will understand them as Unlimited Contract employees.


The system calculates cease of carrier gratuity either through Resignation or by means of Termination. Let’s calculate the quit of service gratuity of an employee who has a restrained agreement.

If the employee has finished more than five years of non-stop service with your corporation and has resigned, then for the first five years he/she is eligible for 21 day’s simple income and for provider above five years, he/she is eligible for 30 day’s fundamental income for each year of carrier.

Calculation:

Hire Date: Jan 01, 2012
As of Date: Dec 15, 2017
Basic Salary: 5000 per month
Basic Salary per Day: 5000*12/365 = 164.3836
The Total Number of Days Worked will be : Hire Date – As of Date = 2176
Total Number of Years Worked: 2176/365 = five.96164
21 Days Basic Salary: 164.3836*21 = 3452.055
30 Days Basic Salary: 30*164.3836*(five.96164-five) = 4742.353 (for above five years).
Total Gratuity: five*3452.055 + 4742.353 = 22002.63

The cease of provider calculates the gratuity total in line with the motive you pick out and date you choose. Other calculations are made in line with the End of Service Settings in your account the use of the same formula.


Resigned Employees

If the employee is already resigned, the gratuity may be delivered from the End of Service Gratuity page. In order to add it, the worker must have the Resignation Date set in his/her profile.

Once the End of Service Gratuity is introduced for the resigned employee, a unmarried payrun might be automatically brought within the Single Payrun listing with a draft status.

Author: Syed Ameer   

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