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To define the EoSB rates, use the HR and Payroll > Master Data See also > End-of-Service Provision Benefit Rates form. For details, refer to Adding an End-of-Service Provision Benefit Rate.

You can load the ready-to-use EoSB rates that comply with the UAE legislation when you click the Load button on the toolbar of the End-of-Service Provision Benefit Rates form. Alternatively, you can manually enter the rates or edit the downloaded rates.

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  • If the option is not selected, the number of earned paid days is calculated as the rate (R) from the interval that matches the current service length, divided by 12 months per year, and multiplied by service length in months (S), that is, R*S/12.
  • If the option is selected, the current service length S is divided into appropriate intervals S1, S2,... SN, and for each interval its interval-specific rate (R1, R2,... or RN) is used. Thus, the total number of earned paid days with the service length in the N-the interval, might be calculated as: ((S1*R1 + (S2-S1)*R2 + ...+ (S-SN)*RN))/12.

For particular examples, refer to  refer to Adding an End-of-Service Provision Benefit Rate.

Notice, that according to the local legislation, with length of service less than 1 year, an employee currently is not entitled to end-of-service benefit no matter whether employment contract is a limited-term contract or unlimited contract, termination is voluntarily or not. If the rate breakdown is intended for final pay of the benefit, you can use the Start Calculation After (Months) field to specify the number of months since the start of employment during which the employee is not entitled to any gratuity. 

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GL Account

Debit

Credit

End-Of-Service Provision


Current EoSB Amount

Expenses

Current EoSB Amount


Table 21. Accrual of EoSB Amounts at month-end closing

For details on calculation of current ESB amounts, refer to End-of-Service Benefit Calculations.

Also, documents of the End-of-Service Benefit Calculations type can be created manually by users and can include one or multiple employees with their benefit amounts. For manually created documents, the Manual Processing check box must be selected. The End-of-Service Benefit Calculations are dated by the last date of the month and list all the employees of an entity for which there are no any End-of-Service Calculation documents which are created manually (have the Manual Processing check box selected).

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The end-of-service benefit is included in the final pay only if the Pay the End-of-Service Benefit check box is selected on the HR and Payroll > Human Resources Documents > Terminations form. For details, refer to Terminations.

Check with the current UAE legislation, whether the available rates are still applicable and if there are any limitations to the final pay.

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Because, most probably, the length of service also includes a certain number of days in addition to a number of full months, the benefit amount prorated for these days should be added to the gratuity amounts. To calculate this additional amount, the number of days (Nd) is multiplied by the average daily salary (A) and rate per day, where the rate per day is the rate R from the last interval divided by 360, that is, Nd* A*R/360.

Note. In accordance with the current UAE legislation, the application checks whether the calculated amount of the benefit for the employee exceeds this employee's earnings during the last two years and selects as the benefit final pay the amount which is less of the two.

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GL Account

Debit

Credit

End-Of-Service Provision

Min (Accumulated_ Amount, Final Pay)


Payroll


Min (Accumulated_Amount, Final Pay)

Table 52. Cancellation of EoSB accumulation

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GL Account

Debit

Credit

Other Expenses (or another expense account)

Final_Pay - Accumulated_Amount


Payroll


Final_Pay - Accumulated_Amount

Table 63. Recording additional expenses

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GL Account

Debit

Credit

Other Income (or another income account)


Accumulated_Amount - Final_Pay

End-Of-Service Provision

Accumulated_Amount - Final_Pay


Table 74. Table 6. Recording additional income