End of Service and Termination

When an employee leaves

End of service (EOS) is the gratuity an employee earns for their years of service. When someone leaves, HR records the termination, then prepares one final settlement that brings together the gratuity, the last salary, unused leave and anything the employee still owes.

How EOS is calculated

The rules come from an End of Service setup (see Payroll Rules). A rule has up to four service bands. For each band you set how many months of salary a year of service earns (Entitlement) and what share is paid (Share: 1 = full, 0.5 = half…). The salary used is the sum of the salary parts ticked on the rule – usually Basic + Housing.

Example of a typical rule: first 5 years – half a month per year; after 5 years – one month per year.

1. Record the termination

1. Open Termination and click Create Termination.
2. Select the Employee Code and enter Date G – the last day of service.
3. Choose the Termination Type (e.g. Resignation, End of Contract, Dismissal – see HR Masters) and write the Reason.
4. Click Save. "Employee Terminated" appears. The employee becomes inactive, their status shows Terminated, and they are left out of future payrolls.

Made a mistake? Deleting the termination from the list revokes it and makes the employee active again.

2. Load an EOS opening balance (when moving from another system)

If an employee's gratuity up to a certain date was already calculated in your old system, load it once with EOS Opening Single:

1. Click Add OpeningSingle and select the Employee Code.
2. Enter the Last EOS Date (the date the old balance was calculated to) and the Amount.
3. Click Save. From now on, service is counted from the Last EOS Date and the amount is added on top.

3. Pay part of the EOS in advance

Some companies pay part of the gratuity before the employee leaves. Record it in Eos-Adv-Payment so it is subtracted in the final settlement:

1. Create a new entry and select the Employee Code. Earlier advances to the employee are listed below.
2. Enter the Received Date and the Amount, then click Save.

4. Prepare the final settlement (EOS Settlement)

1. Open Eos-Settlement and click Add Settlement.
2. Select the Employee. The Last Service Date (from the termination), opening balance, advances, salary details, last vacation and leave balance are shown.
3. Enter the EOS Calculated Date (usually the last service date) and choose the EOS Type (e.g. Termination or Resignation).
4. Review the two blocks:
   • Accrued Details – the full service (days, years, amount);
   • Approved Details – the service after leaving out unpaid absences and/or vacation days, if you tick Exclude Absent Days From EOS or Exclude Vacation Days From EOS. This is the amount paid.
5. Choose what else to include:
   • Include Regular Salary – salary for the days worked in the last month;
   • Include Vacation Salary – pay for leave taken but not yet paid;
   • Deduct Loan Balance – recover the remaining loan balance.
6. Check the Earnings and Deductions panels: the Annual Leave Balanced Payout (unused leave days × daily rate) is added automatically. Add any Other Allowance or Other Deduction with a remark.
7. Check Net Payable and click Save.

Check an employee's EOS at any time

The End Of Service Report shows what an employee would receive on a chosen date – useful for budgeting or before a resignation meeting. The Eos Print report lists the EOS liability for all employees. See HR Reports.

Practical scenarios