Gratuity is a kind of additional compensation apart from the salary provided to an employee while serving for at least five years in an organization.
An employee can withdraw gratuity in case he gets retired, gets superannuation, if he dies, or if he resigns after serving for 5 years in an organization.
A central government employee gets an exemption from the tax whereas a non-government employee pays tax on gratuity depending on the gratuity act followed by an organization.
This is the fine imposed on an employee under the Payment of Gratuity Act 1972 in case an employee leaves the service before 5-year completion or any misbehave at the workplace.
The gratuity amount depends on the last withdrawn salary & no. of serving years in the organization.
Gratuity computation can be organized in the payroll structure module to automatically produce for each employee in its payroll status.