Gratuity and service pay calculator

What the gratuity and service pay calculator does

Many contracts promise a gratuity at the end of service. This workbook works out each person's years of service from the dates they joined and left, applies the number of days of pay per completed year that your policy sets, and shows the gratuity due for each person and the total you must provide.

Who it is for

Employers and HR officers who award gratuity or service pay, and accountants who must provide for it in the accounts.

How to use the workbook

1. Type the days of pay per year of service and the days in a month at the top.
2. List each employee with the date they joined and the date they left or will leave.
3. Enter their monthly basic pay.
4. Read the years served and the gratuity due, with the total at the top.
5. Save a copy under a new name for each month or year, so earlier records stay as they were.

What is inside

• Years of service from the dates
• Days of pay per year set in one cell
• Gratuity for each employee
• Total gratuity at the top
• Daily rate worked out from monthly pay

The workbook has these sheets: Instructions, Gratuity. The main table has the columns Employee; Date joined; Date left; Monthly basic pay; Years served; Gratuity due. Yellow cells are for you to fill in and grey cells calculate by themselves, so leave the grey cells alone. The example rows show how it works; type over them with your own entries.

Tips for getting it right

• Follow the wording of your contract or policy exactly.
• Gratuity is different from statutory severance; check which applies.
• Gratuity can be taxable, so use the terminal dues tax calculator for the tax.
• Provide for the cost each year instead of waiting until people leave.

Why keep this record

Staff records go wrong in small, repeated ways: a figure typed twice, a deadline forgotten, a promise that nobody wrote down. A tidy workbook that everyone uses the same way removes most of those problems. It also gives you something to show an employee, an auditor or a labour officer when a question comes up months later, and it makes the next payroll quicker because the facts are already in one place.

Questions people ask

Do I need to know Excel formulas? No. Type into the yellow cells and the rest is worked out for you. The formulas are visible if you want to see how a figure is reached.

Can I add rows or change the layout? You can add your own columns to the right and your own notes. If you insert rows inside a table, copy the grey formula cells down so the new rows calculate too.

Will it work on my phone or in Google Sheets? Yes for viewing and typing, but dropdown lists and the charts look best in desktop Excel or LibreOffice.

Keeping it safe and up to date

Payroll records are personal data and tax records at once, so keep the file somewhere only the people who need it can open, and keep each month's copy for at least five years. Statutory rates such as NSSF limits and the Housing Levy change, so check the Rates sheet against the official source before you rely on a figure.

Read how to run payroll for a small business for the wider picture. Free calculators that go with it: Terminal dues tax calculator, Severance pay calculator. See more payroll templates or ask us for a custom one.

The workbook works in Microsoft Excel, LibreOffice and Google Sheets. It is a tool to help you work out and record figures, not tax, legal or accounting advice, and it is not affiliated with the Kenya Revenue Authority. If something does not work as described, contact us and we will put it right.

Related guides, calculators and templates

• Free calculator: Terminal Dues Tax Calculator
• Free calculator: Severance, Notice and Leave Pay Calculator
• Guide: What to do when you change jobs: final pay, tax records and benefits
• Guide: Sick, maternity and paternity leave in Kenya: your rights and pay
• Guide: Probation, employment contracts and notice periods in Kenya
• Another template: Employee exit clearance and final dues tracker
• Another template: Leave encashment calculator
• Another template: Severance and terminal dues workbook

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