Reviewed by Finin2min Editorial Desk · Last reviewed 11 August 2026
Prepare an indicative full-and-final statement covering salary, leave, bonus, gratuity, notice pay, reimbursements and deductions.
Build full-and-final settlement
Gross dues
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Net settlement
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Tax treatment and payment deadlines differ by component and governing law.
How This Is Calculated
A full and final settlement totals all dues owed to a departing employee — pending salary, leave encashment, bonus, gratuity (if eligible), notice pay, and reimbursements — then subtracts any recoveries (notice period shortfall, loan recovery, other statutory deductions) to arrive at the net amount payable.
Frequently Asked Questions
What components typically make up a full and final settlement?
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Pending salary up to the last working day, leave encashment for unused earned leave, any pending bonus, gratuity (if eligibility conditions are met), notice pay (if applicable), and pending reimbursements — combined and then reduced by any recoveries owed by the employee.
Is there a legal timeline for paying full and final settlement?
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Yes — labour law reforms have moved toward requiring settlement within a specified number of days from the last working day (historically this varied more by state/employer practice) — check the current applicable timeline, as this has been an area of recent regulatory tightening.
Scope: Computes the full and final settlement amount due to a departing employee, consolidating unpaid salary, leave encashment, gratuity (if eligible), bonus proration and any recoveries/deductions.
Calculation logic
Sum all amounts due to the employee: unpaid salary for the last working period (pro-rated per days worked in the final month), leave encashment for unutilised accrued leave (per the applicable exemption rules — see the Leave Encashment Calculator for the tax treatment), gratuity if the 5-year continuous-service eligibility is met (see the Gratuity Calculator for that computation), and any pro-rated statutory bonus for the partial accounting year worked, if the employee otherwise meets bonus eligibility.
Subtract any amounts recoverable from the employee: notice-period shortfall recovery (if the employee did not serve the full contractual notice — see the Notice Period Pay and Recovery Calculator), any advance/loan outstanding, or other agreed deductions, subject to the overall statutory cap on wage deductions (see the Wage Deduction Cap Checker).
Net full-and-final settlement amount = Sum of amounts due − Sum of recoverable deductions.
Inputs and assumptions
Assumes the individual component calculations (gratuity eligibility, leave-encashment days, notice-period shortfall) are entered accurately by the user, based on their specific employment contract and company policy — this calculator consolidates these components rather than independently determining each one's eligibility from scratch.
Timelines for settlement payment (commonly expected within a short period after the last working day, per state Shops and Establishments Act rules or the Code on Wages provisions on timely payment of wages) are a related compliance point the calculator flags but does not itself enforce.
Exclusions and edge cases
Provident fund withdrawal/transfer is processed separately through EPFO (not part of the employer's direct full-and-final cash settlement) — this calculator does not include the PF corpus itself, only employer-payable cash settlement items.
Does not itself compute the tax withholding (TDS) on the settlement components — gratuity/leave-encashment exemptions and salary TDS should be separately computed using the respective dedicated calculators before determining the net cash payout to the employee.