On the End-of-Service Benefit Rate (create) form, you can view the loaded rates which comply with the UAE labor laws or create a new end-of-service benefit rate (EoSB Rate) and specify conditions of its application.
There are the following required fields on this form: Entity and Employment Contract Type. Once the fields are populated, the system automatically generates a description (which appears in the Description field when you save the record).
The "End-of-Service Provision Rate (create)" form. The Provision usage
If the end-of-service benefit rate belongs to a specific group, select this group in the Folder field.
In the Entity field, select the legal entity of your company which will use this end-of-service benefit rate. The Entity field is available if the Multi-Company Accounting option is selected on the Administration > Settings > General Settings form. The default entity for all users can be selected on the Accounting > Master Data > Entities form. Also, you can specify your personal default entity, for details refer to Personal Settings.
The Description field, which you can leave empty, will be auto-populated with a description generated based on the values in the Termination Type and Employment Contract Type fields. This description will identify this end-of-service benefit rate in drop-down lists.
The Employment Contract Type field shows the type of employment contract of this employee.
If your entity will use this rate breakdown only to calculate the accumulated amount of EoSB for employees with the selected employment contract type, select the Use for Provision Calculation Only option. You need to clear the check box for this option if your entity will use this rate breakdown for calculation of the benefit amount to be paid to an employee with this contract type on service termination of the type selected in the Termination Type field.
If the rate breakdown is intended for calculation of the benefit final pay, you can use the Start Calculation After (Months) field to specify the number of months (N) since the start of employment during which, in accordance with local legislation, employees are not entitled to any gratuity (benefit amount). If the employment terminates after this number of months has passed, the application will calculate the final benefit amount based on the rate breakdown (below on the form) and its usage option (that is, on whether the Use Interval-Specific Rate for Each Interval option is selected or not selected).
If the rate breakdown is intended for accumulation of benefit funds, use the Start Calculation After (Months) field to specify the number of months since the start of employment during which you do not want to accumulate funds for new employees. If employment continues beyond this number of months, in the (N+1)-th month the application will add the missing amount corresponding to the (N+1) months to the benefit provision.
For example, if accumulation of benefit amounts must start after 12 months of employment, during this interval, no accumulation is done. Using the data from the above screenshot, at the end of 13-th month of employment, the amount equal to Daily Salary*(21/12)*13 will be added at once to the balance of the EoSB Provision GL account. Starting the (N+2)th month, the amount equal to Daily_Salary *21/12 will be added monthly to the accumulated amount until the application will switch to another interval.
The "End-of-Service Provision Rate (create)" form. The Termination usage
In the Termination Type field (which is available if the Use for Provision Calculation Only check box is cleared), select the type of termination to which this end-of-service benefit rate breakdown is applicable; you can select from the following options:
- Dismissal: If the employee is fired.
- Resignation: If the employee quits voluntarily.
- End of Contract: If the employment contract is expired.
According to the labor law, the end-of-service termination rate depends on the length of service of the employee. So, in the lower area of the form, you can specify the intervals in months and specify the number of paid days per year of service for each interval (EoSB Rate).
If the Use Interval-Specific Rate for Each Interval option is selected, the total length of service will be splitted into the defined intervals, and the number of granted paid days will be calculated for each interval separately based on this interval's specific rate per year. For example, if the employee quits after 65 months of service, according to the data on the above screenshot, the number of paid days will be calculated as follows:
36*7/12 + (60-36)*14/12 + 5*21/12 = 53.75.
Otherwise, if the check box for the Use Interval-Specific Rate for Each Interval option is cleared, a single rate for all months of service will be used – the rate from (number of paid days per year) from the interval corresponding to the current length of service. For example, if an employee quits after 65 months of service, according to the data on the above screenshot, the rate of 21 paid days per year will be applied to all 65 months of service, that is, the total pay will be calculated (in paid days) as follows:
65*21/12=113.75.
Click the Save button to save the new record or the Save and close button to save the record and close the form.