Separation & End of Service

When someone leaves, BusinessHRM records why and when (the separation), works out what the law says they are owed on leaving (end-of-service amounts: gratuity, end-of-service award, redundancy pay, long service leave, notice pay) from your country's rules, adds those amounts to the employee's final settlement, and gives you ready-made letters in HR Documents.

The figures come from the published labour rules in Settings → Country & compliance, with their source and the date they apply from. They are a starting point, not legal advice: check anything marked Verify with your adviser.

Where to find it

• Employee profile → Start separation (New UI: the button next to Edit; classic: the ⋯ menu on the profile). Once a separation exists the button reads View separation, and the profile header shows a Leaving badge.
• Payroll → Final settlement for the leaver shows the end-of-service lines.
• Reports → Separations register and Reports → End-of-service liability.
• Policy: the Change policy link in the separation form (Separation & end-of-service policy).

Who can use it: admins and anyone with Edit Employees = All can start, edit, confirm and cancel separations and see the amounts. View Employees = All can see the separation (type, reason, dates) without amounts and the separations register.

Before you start

1. Set the country / region for the company, the work location or the employee in Settings → Country & compliance (otherwise the calculator does not know which law applies).
2. Make sure the employee has a salary in Payroll (basic and gross). You can type the wage in the form instead.
3. Choose your end-of-service policy once (see Company policy below).

Starting a separation

Open the employee → Start separation. The form has five steps and the amounts update as you type.

1. What is happening: the separation type and a reason.

   Type	Notice given by	Typical effect
   Resignation	employee	Saudi award reduced (⅓ / ⅔) for short service; UAE no reduction
   Termination (without cause)	employer	full gratuity; pay in lieu of unserved notice
   Termination (with cause / misconduct)	employer	PK gratuity and Saudi award not payable; no statutory notice
   End of fixed-term contract	none	contract ends on its date
   Redundancy / layoff	employer	UK statutory redundancy, Australian NES redundancy
   Retirement, Death in service, Mutual agreement	—	full gratuity where the law gives one

2. Notice and last day: the date notice was given, the last working day, your contract notice (days, used when it is longer than the legal minimum) and how notice was handled: worked in full, paid in lieu, partly worked or waived. Leave Days of notice worked empty to count from the notice date to the last day.

3. Pay used for the calculation: basic and gross monthly wage (filled from Payroll on the last working day), approved unpaid leave days (not counted as service in the UAE), and the rules jurisdiction (Automatic = employee → work location → company). Country questions appear when they matter:

   • Saudi Arabia: Full award reason (Art. 81 employer breach, Art. 87 marriage / childbirth / force majeure) for a resignation that still earns the full award.
   • Australia: Long service leave already taken and Pro-rata reason applies (resignation for illness or pressing necessity).

4. Entitlements: every amount with a status (Due, Not eligible, Not payable, Exempt, Paid by fund), a short formula, How it was calculated (the full trail: service dates, wage used, each band, cap, reductions) and the rule's source, start date and Checked / Verify mark. Below: the notice (required days, served, pay in lieu or shortfall), the final pay deadline, whether unused leave must be paid, and the leaver documents the law requires.

5. Exit interview and rehire: whether you would rehire, the exit interview date and notes (HR only).

Click Save draft to come back later, or Confirm separation.

What confirming does

• The last working day becomes the employee's exit date and the notice dates are saved as the notice period on the profile (the same fields as Edit employee), so dashboards, leave rules, letters and payroll all see it.
• The end-of-service amounts are added to the employee's final settlement.
• Nothing is paid or emailed by itself.

You can edit a confirmed separation until the final settlement is confirmed. Cancel separation keeps the record as cancelled and clears the exit date it set.

What the calculator covers

Weekly pay = monthly gross × 12 ÷ 52. UAE daily wage = basic ÷ 30.

Company policy

Change policy (in the form) sets, for the whole company:

• Gratuity policy: Statutory (paid in the final settlement), Gratuity fund / savings scheme (shown but not added: the fund pays it) or Provident fund instead of gratuity (Pakistan).
• Wage basis: as the law says (UAE basic; Pakistan and Saudi Arabia full wage), or always basic / always gross if your contracts say so.
• Default contract notice in days.
• Reason categories (one per line).

To use a different legal figure (for example a higher gratuity by policy), override the rule in Settings → Country & compliance → Rules from a date.

Final settlement

Payroll → Final settlement for the leaver (or Open the final settlement from the separation):

• End-of-service lines (gratuity / EOS award, redundancy pay, long service leave) are added from the confirmed separation, each with its formula and source.
• Notice pay is pre-filled with the pay in lieu of notice from the separation. It is one field, so it is never counted twice; change it if needed.
• Leave encashment, salary to the last day, already paid and loan recovery stay the settlement's own lines; the separation does not repeat them. If the law says unused leave must be paid and no leave days are entered, the sheet reminds you.
• An employee who did not serve their notice: the shortfall is shown as a hint only. Recover it with a negative Other amount only if the contract allows.
• Confirming the settlement creates the settlement payslip with every line. After that the separation is locked.

Letters (HR Documents)

All leaver letters are issued from HR Documents (with e-signing where needed). Import prebuilt → Offboarding now includes:

• Resignation Acceptance Letter
• Termination letters for Pakistan, UAE, Saudi Arabia, UK (dismissal and redundancy), Australia and the United States
• Service / experience certificates for the UAE (Art. 13), Saudi Arabia (Art. 64) and Pakistan
• Full & Final Settlement Statement (employee signs on receipt)
• US separation notices: California Notice of Change in Relationship and New York Termination Notice & Record of Employment

They use the new Separation & final pay merge fields, e.g. {{separation.last_working_day}}, {{separation.notice_days}}, {{separation.service_length}}, {{separation.gratuity_amount}}, {{separation.redundancy_amount}}, {{separation.notice_pay}}, {{separation.settlement_net}}, {{separation.final_pay_deadline}}, {{separation.leaver_documents}}.

Reports

• Separations register (People): leavers in the period by type and reason, voluntary vs involuntary, rehire eligibility, with filters for type, reason and department. Export CSV / Excel / PDF.
• End-of-service liability (Finance): the gratuity / end-of-service (and Australian long service leave) every employee has accrued on the last day of the period, as if each left without cause that day, from day one of service. Use it for month-end provisions in the UAE, Saudi Arabia and Pakistan. Filters: department, country. Employees with no country or no gratuity rule count as zero (shown as No rule / country). Redundancy is contingent and not included.

API

/api/v1/separation (API-key scope Separations & end of service): list, show, preview (calculate without saving), record / confirm, cancel, liability, policy. See Developers → Separation & End of Service.

Example

An employee in Dubai, basic AED 10,000, joined 7 Mar 2023, terminated without cause with notice given on 20 Nov 2026 and last day 30 Nov 2026 (30 days contract notice, 11 worked):

• Service 3 years 8 months 24 days → 3.7342 years × 21 days × AED 333.33 = AED 26,139.40 gratuity.
• 19 unserved notice days × daily gross → pay in lieu, pre-filled as Notice pay in the final settlement.
• All dues within 14 days; service certificate and visa cancellation listed as leaver documents.

Troubleshooting