Lesson 5 — Why accrual starts in month one
This is the question a finance director asks first, and the answer is a distinction rather than a setting.
Article 51 makes gratuity payable once the worker completes one year of continuous service. That is a condition on payment. It is not a condition on the liability being earned — a worker with four months of service has done four months of work, and the entitlement that work builds is real from the first month even though nothing would be payable if they left tomorrow. Source: FDL 33/2021 Art. 51.
In Odoone, the two ideas have two different homes. The Minimum Service (Months) field on the company holds the one-year threshold, and what it governs is whether anything is payable on departure. Accrual is not gated by it. As the module guide puts it, the provision still accrues below the threshold, because the liability is being earned. The one-year rule governs whether the gratuity is payable, not whether it is accruing.
The settlement stamp says so explicitly. When HR approves a resignation, the End of Service block is stamped with the gratuity owed at the last working day, the months of continuous service, and a short note explaining the basis — including when the figure is zero, so a nil settlement never reads as a bug. That last detail is worth more than it looks: a blank field invites someone to go looking for a broken calculation, while a zero with a stated reason ends the conversation.
The worked example. Aisha joined on 1 May 2026 on a basic wage of AED 6,000, so her daily rate is AED 200. At 31 August 2026 she has four months of service. Parts of a year are paid in proportion, so four months of the first band is 21 days multiplied by 4 and divided by 12, or 7 days, which prices at AED 1,400.
| Question | The answer for Aisha at 31 August 2026 |
|---|---|
| Continuous service | 4 months |
| Is gratuity accruing? | Yes, and AED 1,400 is carried in the provision |
| Is gratuity payable if she leaves? | No, because she is below one year of continuous service |
| What her resignation record is stamped with | AED 0, with a note explaining the basis |
What the module deliberately does not do next. If Aisha does leave at four months, the module guide documents neither an automatic release nor a write-back of the AED 1,400 that has been provided. Releasing an accrued liability against an actual payment stays in accounts payable, where it has its own approval — and here there is no payment to release it against. So that is a journal you make deliberately, and Lesson 8's difference figure is what will tell you it is still sitting there.
The failure mode. Two opposite ones, and they arrive from different directions. Finance sees people accruing who could not claim, calls it an overstatement, and asks for them to be excluded — which would understate the liability of every employee in their first year, in a workforce where that is often a large share of headcount. HR sees a zero on a settlement, calls it a bug, and raises a ticket. Both are answered by the same sentence: earning and payability are different questions, and Article 51 only makes the second one conditional on a year.