End of Service Benefit (ESB) in TamilAccounting
When an employee leaves, their final settlement is rarely just one number. There is the statutory end-of-service benefit, any leave still owed, outstanding loans, pending reimbursements and advances to recover. TamilAccounting's End of Service Benefit (ESB) feature pulls all of that together, calculates the net amount, posts a balanced journal and — if you wish — pays it from the bank, all in a single screen.
What it does
In one transaction, ESB:
- calculates the statutory benefit using the rule for your country,
- rolls in any pending leave-encashment carry forward and clears that liability,
- recovers outstanding loans and employee advances,
- adds any pending reimbursements, and
- raises the net ESB Payable, with the option to pay it from a bank straight away.
Only one ESB can be processed per employee.
Before you start
- Under HRM › Settings, set the ESB Country (this drives the calculation), whether the benefit is based on Basic or Gross salary, and any country-specific parameters.
- Under GL Setup, map the supporting accounts: round-off, salary payable, loan payable and reimbursement claimable.
- On the employee record, make sure the termination / status-change date is set. For anyone who is no longer active this is essential — without it the service period would be zero, so the system blocks processing until you set it.
Processing an ESB, step by step
- Open HRM › End of Service Benefit and choose the department and employee.
- Review the employee panel — status, service period (years, months, days), last payslip date, termination date and notice period.
- Check the calculation panel: Calculated EOSB, loan balance, outstanding leave encashment (listed oldest first), pending reimbursements, and the headline Payable EOSB After Deductions, which is EOSB + carry forward − loans − advances.
- In the settlement section, add a round-off if needed, choose the GL Account the benefit is credited to, and optionally a bank account to pay it immediately. If the employee instead owes the company an advance, you can collect the refund here.
- Click Process ESB. You can then view the ledger entry and print the ESB statement.
How the benefit is calculated
The amount follows the statutory rule for the configured country, using the employee's years of service and last paid salary:
- Botswana — severance pay for employees past the qualifying period: eligible years × weekly wage × the configured number of weeks, with severance tax deducted.
- Bahrain — half a month's wage for each of the first three years, then a full month for each year after.
- Saudi Arabia — tiered by years of service and whether the employee resigned or was terminated.
- India — tiered by length of service.
The accounting behind it
A complete ESB raises a single balanced journal:
| Line | Dr / Cr |
|---|---|
| ESB expense (incremental) | Dr ESB Expense |
| Carry-forward leave cleared | Dr Leave Encashment Payable |
| Pending reimbursement | Dr Reimbursement Claim |
| Loan recovered | Cr Loan Payable |
| Employee advance / balance | Dr / Cr Salary Payable |
| Total benefit owed | Cr ESB Payable |
| If paid by bank | Dr ESB Payable Cr Bank |
Notice that the expense booked here is incremental — the total benefit minus the leave-encashment carry forward that was already accrued. That keeps the journal balanced and makes sure the liability is never counted twice.
Good to know
- Pending leave-encashment carry forward is settled automatically inside ESB — you don't run a separate encashment for it.
- For cleaner books, consider using a dedicated ESB Payable account for the GL Account field so the liability is kept apart from your expense and salary-payable accounts.
From a messy, error-prone manual calculation to one balanced transaction — that is what ESB in TamilAccounting is built to do.
