Payroll · Daily operations · 6 min read

End-of-service provisions

Work out the monthly gratuity liability per employee, post the month's charge, and read the roll-forward.

Required permission: payroll.prepare (propose, cancel), payroll.post (post)

Before you begin

The company chart has an expense account and a provision account. If you leave the fields empty the system uses 620200 and 240200 where they exist.
Employees have contracts with a basic salary and a join date.
You hold payroll.prepare to propose. A different person with payroll.post posts.

Go to Payroll > End-of-service provisions.
Enter the Month end, default the last day of the month, for example 2026-09-30.
Enter Base components, a comma list of contract earning codes summed as the monthly base. The default is BASIC.
Enter the Expense account and Provision account codes, or leave them empty.
Click Work out the provision.
Open the run to see, per employee: service days, gratuity days, base, provision, the previous provision and the month's charge.

A different user with payroll.post opens the run and clicks Post.
Use Cancel on a proposed run you do not want. Close finishes a posted run.

On the same screen set From and To dates and open the roll-forward.
It shows the opening balance, the charges and the closing balance, which agree with the provision ledger account.

Posting creates a journal: debit the expense account, credit the provision account, for the month's charge.
Example: employee X joined 1 April 2019 with BASIC 10,000. Service days are counted to 30 September. The gratuity days follow the UAE reading (21 days a year for the first five years, 30 after, part years pro rata). The provision is gratuity days x 10,000 / 30. Employee Y joined 1 January 2026, under one year, so the provision is 0.00.
Charge = this month's provision minus the last posted provision. If X leaves in October, the next run shows provision 0.00 and a charge equal to minus the earlier one, with the note 'left: provision released'.

Only one proposed run at a time: 'A provision run is already waiting to be posted.'
Provisions move forward only: 'A provision is already posted for 2026-09-30 or later; provisions move forward only.'
'A provision is posted by somebody other than whoever proposed it.'
'Name the end-of-service expense and provision accounts of this company's chart.' if a typed code does not exist.
A base code the contract does not have is noted on the line, not refused.
The screen shows a disclaimer: the figures need approval by your specialist.
The provision does not count unpaid absence days as the final settlement does, and the roll-forward has no separate "paid" line; a leaver appears as a negative charge. Treat it as an estimate and reconcile against settlements.
The status labels may appear in English in the Arabic screen.

Updated 3 October 2026