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Gratuity is a terminal benefit — a lump sum you owe an employee for their years of service, paid when they leave. If you only recognised that cost on the day someone resigns, your books would lurch: years of accumulating liability landing as a single expense. Hitaji 360 avoids that by letting you accrue gratuity month by month while the employee works, building up a provision (a liability) over their tenure, and then drawing that provision down when they actually separate. Gratuity is a per-business choice. A business that offers gratuity turns on monthly accrual and sets the rate; a business that doesn’t simply leaves it off. The same rate drives both the monthly accrual and the amount paid at separation, so the two always agree. You’ll find this at: the toggle and rate live in Payroll settings (/settings/erp/finance/payroll-settings). Accrual runs automatically; settlement happens through the separation flow.
📷 Screenshot: the gratuity section of payroll settings — the “Accrue gratuity monthly” toggle and the months-per-year rate — to be added.
Multi-business: the gratuity policy is set per business (per accounting book). Each business accrues against its own settings and posts to its own ledger.

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The two settings that control gratuity

Both live in Payroll settings:
Important: turning the toggle off only stops the monthly accrual. It does not stop gratuity being paid at separation. Whether gratuity is owed at all is governed by the rate — set it to 0 if your business owes no gratuity.
Setting payroll:config is needed to change either value.

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Monthly accrual (automatic)

Once a business has enabled accrual, Hitaji 360 runs a monthly job (early on the first of each month) that, for every active employee in that business, posts one month’s worth of gratuity provision. The amount per employee is:
For example, an employee on 1,000,000 with a rate of 1.5 accrues (1,000,000 × 1.5) ÷ 12 = 125,000 each month. The job skips an employee when the business hasn’t enabled accrual, when the rate is zero, when there’s no active salary assignment, or when it can’t resolve the employee’s accounting contact (so it never posts a liability it couldn’t later release). Each month is posted once per employee — re-runs never double-accrue. A privileged user can also trigger accrual manually (for example to back-fill months right after enabling it). The manual run is an HR-admin action.

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Settlement (at separation)

When an employee separates, their gratuity is computed and paid through the terminal (off-cycle) payroll run as part of their final settlement. The amount is:
Only completed years count (an employee under a year of service gets nothing unless your policy says otherwise). Because the same rate is used, the payout matches what was being accrued. As the settlement posts, Hitaji 360 draws down the provision already built up for that employee: it reads their live gratuity-payable balance and reverses it, so the accrued liability is released rather than the whole gratuity hitting expense afresh. If accrual was never enabled, the provision is zero and the gratuity is simply expensed at separation — both paths are correct. For the full leaver process see Separation (offboarding).

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Permissions

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Behind the scenes — the accounting

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Monthly accrual

Each month the provision is recognised as an expense and a liability: The payable is stamped with the employee’s contact so the balance can be isolated and released for that specific leaver at separation.

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Settlement draw-down

When the employee separates, the provision built up for them is released: The actual cash payout of the gratuity flows through the terminal payroll run (and is subject to PAYE like other terminal pay). The draw-down above ensures you don’t expense the same gratuity twice — the years of monthly accrual net against the settlement.
The draw-down is a reconciliation refinement: if the gratuity accounts aren’t set up or the provision is zero, it safely does nothing and the terminal run expenses the gratuity directly.