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.
Attendance through last working day, approved variable pay and payroll cut-off.
Payslips, attendance, payroll register and bank advice.
Leave encashment
Eligible leave balance and rate under applicable law/policy.
Leave ledger, rule/policy and calculation.
Bonus/incentive
Statutory or contractual eligibility, performance period and vesting.
Scheme, approval, targets and prior payments.
Gratuity
Coverage, continuous service, last drawn wages and completed service under applicable law.
Service record, wage base, nomination and payment record.
Recoveries
Only lawful, evidenced deductions with the required authority.
Advance/asset record, notice term, consent or reasoned determination.
Freeze inputs Confirm last working day, attendance, leave, assets and payroll changes.
Compute separately Apply each component's own legal and tax treatment.
Review Reconcile HR, payroll, finance, tax and social-security records.
Pay and issue Transfer dues and deliver statement, payslip, tax and benefit records.
Worked example
An employee has Rs 42,000 salary due, Rs 18,000 approved leave encashment and Rs 5,000 reimbursement. A disputed laptop-damage estimate of Rs 30,000 has no investigation or authority. The calculator can total undisputed dues, but finance should not automatically net the unproved damage estimate from wages or statutory benefits.
Advisory case study
A manager signs a no-dues form after payroll cut-off, but the employee's gratuity and variable-pay assessment are still open. No-dues clearance is not proof that every statutory or contractual component was determined. Keep an exception register until each amount is calculated, reviewed, paid or supported by a reasoned non-payable conclusion.
Questions
Is there one universal settlement deadline? No single calculator answer fits every component, location and period. Apply the wage, gratuity, bonus, tax, social-security and contract rules in force. Can final settlement be withheld for asset return? Asset recovery and disciplinary rights must be handled lawfully; do not treat blanket withholding of earned or statutory dues as a default remedy.
This tool performs arithmetic from the inputs. Eligibility, deadlines, deductions and tax treatment require the applicable law, policy and employee facts.
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.