You can create Gratuity Settlement from payroll configuration.Payroll->Configuration->Gratuity Configuration

Set up the gratuity configuration and set the contract type if contract type is limited then during gratuity settlement if you have not specified the end date for contract, gratuity configuration of limited type will be taken.

Set up the gratuity configuration and select contract type,if contract type is Unlimited then during gratuity settlement if you have specified the end date for contract, gratuity configuration of Unlimited type will be taken.

Now create contract for the employee and set up the wage type.

You can create gratuity settlement from 'End of service' menu.Payroll->End of service.

By selecting the employee, if the employee have running contract,contract type of employee gets selected,And gratuity amount gets calculated. Gratuity payment is calculated based on wage type in the contract form. Daily Wage = Basic Salary/Employee Daily Wage Days Working Days Salary = Daily Wage * Working Days Gratuity Pay Per Year = Working Days Salary * Percentage Gratuity Payment = Gratuity Pay Per Year * Gratuity Calculation Years Gratuity Payment = round(Gratuity Payment,2)