Full & Final Settlement Calculator
Salary, leave encashment, gratuity, notice pay and bonus less recoveries, with the 2-day payment rule.
The Full and Final Settlement Calculator adds up what is due to an employee who leaves: salary for days worked, leave encashment, gratuity, notice pay and bonus, less recoveries. Gratuity follows the Code on Social Security, 2020 (5 years of service, or 1 year for fixed-term employees, capped at Rs 20 lakh). Under Section 17(2) of the Code on Wages, 2019, wages due on resignation, removal, dismissal, retrenchment or closure are payable within two working days. It is for employees and HR teams preparing a settlement.
Use the Full & Final Settlement Calculator
Full and Final Settlement
Salary for days worked₹ 0
Leave encashment₹ 0
Gratuity ₹ 0
Notice pay (in lieu of notice)₹ 0
Bonus and other dues₹ 0
Gross dues₹ 0
Less: notice recovery₹ 0
Less: other recoveries₹ 0
Net payable (before TDS)₹ 0
Enter the salary figures and length of service.
Tax: gratuity for employees covered by the gratuity law is exempt up to the least of the statutory amount, ₹20 lakh and the amount received. Leave encashment on leaving is exempt for non-government employees up to the least of four limits, including ₹25 lakh (lifetime). Salary, notice pay and bonus are taxable as salary.
Work out an employee's full and final (F&F) settlement. The gratuity and leave-encashment figures use the same method as the Gratuity Calculator and the Leave Encashment Calculator. Income tax (TDS) on the settlement is not computed.
How each part is worked out
- Salary for days worked: monthly gross ÷ days in the month × unpaid days worked.
- Leave encashment: monthly salary ÷ 30 × leave days (as in the Leave Encashment Calculator). Under the OSH Code, 2020, unused leave is paid on retirement, resignation or termination; the salary used depends on the leave policy.
- Gratuity: Basic + DA × 15 / 26 × years of service, where a part of a year in excess of six months counts as a full year. Payable after 5 years of continuous service (1 year for fixed-term employees, pro-rata); no minimum on death or disablement. Capped at ₹20 lakh. Under the Code on Social Security, 2020, wages for gratuity include Basic, DA and retaining allowance, and allowances above 50% of total pay are added back.
- Notice pay: monthly gross ÷ 30 × notice days not served. The employment contract decides whether notice pay is paid or recovered and on which salary.
- Timelines: wages due on resignation, removal, dismissal, retrenchment or closure are payable within two working days (Code on Wages, 2019, Section 17(2), in force from 21 November 2025). Gratuity is payable within 30 days of it becoming due, with simple interest for delay.
- Tax references: Section 10(10) and 10(10AA) of the Income-tax Act, 1961 (up to Tax Year 2025-26) and Section 19 of the Income-tax Act, 2025 (from Tax Year 2026-27). The employer deducts TDS on the taxable part.
Important note: This tool provides an indicative output only. It does not factor in every special provision, surcharge, exception, or recent notification. Verify with the firm before acting on any computation.
Frequently Asked Questions
What is included in a full and final settlement?
A full and final settlement usually covers salary for the days worked and not yet paid, encashment of unused leave, gratuity where the employee is eligible, notice pay where the employer releases the employee without notice, and any bonus, incentive or reimbursement due. Recoveries such as loans, advances, notice shortfall and unreturned company assets are deducted, and TDS is deducted on the taxable part.
Within how many days must the full and final settlement be paid?
Under Section 17(2) of the Code on Wages, 2019, in force from 21 November 2025, wages due to an employee who resigns, is removed, dismissed or retrenched, or becomes unemployed on closure of the establishment are payable within two working days. Gratuity has its own timeline under the Code on Social Security, 2020 and is payable within 30 days of becoming due.
Is gratuity payable if I resign before completing 5 years?
A regular employee needs 5 years of continuous service for gratuity on resignation. A fixed-term employee is entitled to pro-rata gratuity after 1 year of continuous service under the Code on Social Security, 2020. The minimum service condition does not apply on death or disablement. Gratuity is last drawn Basic + DA x 15/26 x years of service, capped at Rs 20 lakh.
Is the full and final settlement taxable?
Salary, notice pay and bonus are taxable as salary. Gratuity is exempt for employees covered by the gratuity law up to the least of the statutory amount, Rs 20 lakh and the amount received. Leave encashment on leaving is exempt for non-government employees up to the least of four limits, including a lifetime cap of Rs 25 lakh. These exemptions are in Section 10(10) and 10(10AA) of the 1961 Act and Section 19 of the Income-tax Act, 2025.
Can an employer recover notice pay from the final settlement?
If the employee leaves without serving the notice period required by the employment contract and the employer does not waive it, the contract usually allows the shortfall to be recovered from the dues. The amount and the salary it is based on depend on the contract; this tool uses monthly gross divided by 30 for each day not served.
Due in the next 30 days
LabourFull compliance calendar → Statutory dates, which can be extended by notification. General information only.