My Exit FileSaved results stay on this device — no login, nothing sent to usStart my exit file

Free · private · stays in your browser

Everything you're owed when you leave a job in India — your full and final settlement, calculated in one place

Notice pay, gratuity, leave encashment, provident fund and the tax on all of it. Work through them in order and the settlement stops being a number someone else hands you.

Start my exit file See every calculator

No login
Nothing sent to us
Everything runs on your device

My Exit File

10 steps

Saved to this device only — pick it up on any page, or another phone.

Quick Answer

What is full and final settlement, and what should I be paid?

Your full and final settlement is the closing account between you and your employer. It should bring together your unpaid salary up to your last working day, encashment of unused earned leave, gratuity if you qualify, and any pending bonus or reimbursements — less legitimate deductions such as tax, notice shortfall, and unreturned company assets.

On timing, the law changed recently and most guidance has not caught up. Section 17(2) of the Code on Wages, 2019 requires wages to be paid within two working days of resignation, removal, dismissal or retrenchment — in force since 21 November 2025, replacing the 30-to-45-day wait people were used to. The checklist below works through each component in order and keeps a running total, so you can check your employer's statement against your own figure instead of taking it on trust.

Estimated time: 10–15 minutes for the full checklist
Cost / impact: Free · no signup · runs in your browser
What you need: Joining date, last working day, salary breakup, leave balance

Key takeaways

→FnF is not one payment— it is five or six separate entitlements netted against your employer's deductions. Check each one separately.
→Your provident fund is not part of FnF. It sits with the EPFO and is withdrawn or transferred on its own timeline.
→Gratuity has an eligibility test before it has an amount. Most calculators skip straight to the amount and assume you qualify.
→Ask for the itemised FnF statement before you sign it. Once signed, it is the document your employer will rely on in any dispute.
→Most of what governs your exit sits in your contract and company policy, not in statute. Read the contract first.

Your exit checklist

Work down the list. Anything you calculate is saved to your exit file on this device and shows up here, so you can stop halfway and pick it up on another day — or another phone.

Collect your documents

Chase these while you still have a working email address and a manager who answers. Getting a Form 16 or a relieving letter out of a company you left eight months ago is a different and much harder job.

Documents to collect before you leave

0 / 7

Relieving letterMost employers ask for it before they will let you join. Without it a background check can stall your next offer.
Experience / service certificateStates your dates of service and designation — the proof behind everything on your CV.
Form 16Your employer's TDS certificate for the year. You need it to file your return for the financial year you left in.
Final payslip and FnF statementThe line-by-line breakdown of what was paid and what was deducted. Ask for it in writing even if the money has landed.
PF passbook / UAN detailsConfirm your UAN is active and that your exit date has been marked by the employer, or a withdrawal or transfer will not go through.
Gratuity Form I acknowledgementIf you are claiming gratuity, keep a dated, acknowledged copy of the form you submitted.
Signed full and final settlement statementRead it before signing. Once signed it is the document your employer will point to if you dispute an amount later.

What a full and final settlement is — and what it must contain

“Full and final settlement” is the phrase Indian employers use for closing the account when someone leaves. It is not a single legal instrument with a fixed statutory definition — it is a payroll process that nets everything you are still owed against everything you still owe, and issues the difference along with a statement. Because it is a process rather than a defined document, what it contains varies more between employers than most people expect, which is exactly why it is worth checking line by line.

A settlement statement that is doing its job will separately show each of the following, rather than collapsing them into one figure:

Components of a full and final settlement in India
Component	What it covers	Owed to
Unpaid salary	Days worked in your final month up to the last working day	You
Leave encashment	Accumulated earned leave your policy allows you to cash out	You
Gratuity	Payable where you meet the eligibility conditions	You
Bonus / incentive	Declared amounts still unpaid at the time you leave	You
Reimbursements	Approved expenses you have claimed but not been paid	You
Notice shortfall	Recovery where you left before serving full notice	Employer
Advances and loans	Outstanding salary advances or company loans	Employer
Unreturned assets	Laptop, phone, ID card, access devices	Employer
Tax (TDS)	Deducted at source on the taxable elements	Government

Your provident fund is deliberately absent from that table. PF is held by the EPFO, not your employer, and is withdrawn or transferred separately — an employer who tells you your PF is “part of the settlement” is describing their own paperwork, not where the money is.

How long a settlement takes, and what changed

The number most people will tell you is 30 to 45 days. That is custom, not law, and as of 21 November 2025 the law says something dramatically different.

The rule changed — two working days

Section 17(2) of the Code on Wages, 2019 requires wages to be paid within two working days where an employee is removed, dismissed or retrenched, or resigns. The Code came into force on 21 November 2025, replacing the position under which employees routinely waited 45 to 60 days.

It covers wages, not the whole settlement. That distinction matters when you are chasing payment. Your unpaid salary for days worked is what the two working days bite on. Gratuity runs on its own statutory timeline; leave encashment, bonus, reimbursements and notice-pay adjustments run on your contract and your employer's policy. Asking for “my FnF within two working days” is easy for HR to deflect. Asking for final wages under s.17(2), and the rest on its own footing, is not.

Two further points of care. The provision allows the appropriate Government to prescribe a different time limit where it considers that reasonable, so a state may vary it. And a rule taking effect is not the same as employers complying with it — many are still running 30-to-45-day payroll cycles.

Practically, the delay you experience is usually caused by something mundane: an asset not marked returned, a manager who has not approved your final leave balance, or a reimbursement claim sitting unapproved. Ask which of those is holding it, by email. Naming the blocker — and now, the two-working-day rule — moves settlements far more often than chasing “the FnF” in the abstract.

What employers deduct, and which deductions are legitimate

Deductions are where most settlement disputes actually live. Four are routine and usually defensible if your contract provides for them:

Notice shortfall. Where you leave before serving the notice your contract requires. This is the single most disputed line, and the disagreement is almost always about the pay component used, not the principle.
Salary advances and company loans. Outstanding balances are normally recovered from the settlement. Ask for the amortisation schedule if the figure surprises you.
Unreturned assets. Laptops, phones, access cards. Return them and get a written acknowledgement — recovering a deduction after the fact is far harder than avoiding it.
Excess leave taken. Leave taken beyond what you had accrued is usually adjusted against your final pay.

What makes a deduction contestable is usually one of three things: it is not provided for anywhere in your contract or your employer's policy, it is calculated on a different pay component than the contract specifies, or it is applied without an itemised explanation. In all three cases the productive first move is the same — ask, in writing, for the amount, the rate it was calculated on, and the clause it relies on.

The categories of deduction an employer may lawfully make from wages are regulated, and the Code on Wages now governs them. Which provision bites depends on your establishment's category, so if you are challenging a deduction on legal grounds rather than contractual ones, take advice on the operative rule.

If your settlement is not paid: the escalation order

Work through these in sequence. Skipping to the last step first tends to slow things down, because every external forum will ask what you did internally.

1Email HR and payroll. Ask for a dated, itemised FnF statement and the specific reason for the delay. Use email, not a call — you are building a record as much as asking a question.
2Escalate internally, in writing. To your HR head or your employer's formal grievance mechanism. Reference the earlier email and the date you sent it.
3Send a written demand. A formal letter setting out the amount, the period, and a reasonable deadline. Many settlements are released at this stage.
4Approach the labour authorities. The appropriate forum depends on your role, your salary, and your state. Take advice on which applies before filing — the wrong forum costs months.
5For gratuity specifically. Gratuity has its own forum, separate from a general wages claim — and the name changed with the labour codes. If you left on or after 21 November 2025 it is the competent authority under the Code on Social Security 2020 (appointed under s.58, disputes determined under s.56, with a sixty-day appeal). If you left before that, it was the controlling authority under the Payment of Gratuity Act 1972. Cite the right one.

Which forum has jurisdiction turns on your role and your state, and the filing deadlines and forms sit in rules that are amended from time to time. Confirm both before you file — missing a limitation period is an avoidable way to lose a good claim.

Each component of your settlement, and where it is decided

Every line on an FnF statement is governed by something different — a section of the Code on Wages, a section of the Income-tax Act, your appointment letter, or your employer's leave policy. That is the reason a single “FnF calculator” producing one number tells you nothing you can act on. Below is what decides each line, and the calculator that works it out.

Notice period and your last working day

Your notice period comes from your appointment letter, not from statute, and the date it lands on decides several other numbers — your service length for gratuity, your final month's salary, and how much leave you can still encash. If you are leaving before the notice runs out, the shortfall is normally recovered from your settlement at a per-day rate that your contract should specify.

Notice period calculator Serve it or buy it out Taking leave during notice

Gratuity — eligibility comes before the amount

Gratuity has a qualifying-service test that most calculators skip straight past. Whether you meet it depends on your continuous service and how the final part-year is treated, and there is settled case law on that point. Only once you clear the test does the 15/26 formula, the six-month rounding rule and the ₹20 lakh ceiling come into play — and whether your establishment is covered by the Act changes the divisor.

Am I eligible for gratuity?Gratuity calculator

Leave encashment on your unused earned leave

What your unused earned leave is worth depends on three things your employer chooses: which leave types are encashable, the divisor used to turn a monthly salary into a day rate, and any cap on the number of days carried forward. Two colleagues with identical balances can be paid different amounts because of the divisor alone.

Leave encashment calculator

Provident fund — withdraw or transfer

Your PF is not part of the settlement. It sits with the EPFO, and when you leave you choose between withdrawing the balance and transferring it to your next employer. The choice has a tax consequence that turns on your continuous service, and a compounding consequence that is usually larger than the tax one.

Withdraw or transfer my PF

Tax on the exit payments

The settlement is not taxed as one lump. Gratuity, leave encashment, retrenchment compensation and VRS each have their own exemption running on a separate least-of test, and notice pay is treated differently again. Splitting the settlement into exempt and taxable parts is what tells you whether the TDS your employer deducted was right.

Tax on exit payments Section 89 relief (Form 10E)

Resigning, retrenched, or terminated — the exit is not the same

Most of this page applies whichever way you are leaving, because unpaid salary, leave encashment, gratuity and PF do not care who ended the employment. Three things do change, and they are worth identifying before you start negotiating anything.

Notice runs in the other direction. When you resign you owe notice; when your employer ends the employment they normally owe you notice or pay in lieu of it. Which way the shortfall runs decides whether the notice line on your statement is a deduction or a payment.
Retrenchment compensation is a separate entitlement. Where retrenchment provisions apply to you, compensation is owed on top of the ordinary settlement, and it carries its own income-tax exemption — a different test from the gratuity one. It is the line most often missing from a statement, because the payroll template does not have a row for it.
The reason on your paperwork follows you. Resignation, retrenchment and termination for cause read very differently to a future employer and to a background-check vendor. Whatever is agreed verbally, get the wording of the relieving letter confirmed in writing before your access is switched off.

The exit tax calculator handles retrenchment compensation and VRS as separate components with their own exemption tests, so if either applies to you, run it there rather than assuming the gratuity exemption covers it — tax on exit payments.

Every calculator in the exit file

Free, no signup, and each one shows the working line by line so you can put the same arithmetic in an email to HR.

Notice period calculatorConfirm your last working day.Notice buyout decisionDecide whether to serve or buy out notice.Leave during noticePlan leave during your notice period.Gratuity eligibility checkerCheck whether you qualify for gratuity.Gratuity calculatorCalculate your gratuity amount.Leave encashment calculatorCalculate leave encashment.Exit payment taxWork out tax on your exit payments.Section 89 relief (Form 10E)Claim Section 89 relief.PF: withdraw or transferDecide what to do with your PF balance.Exit document checklistRelieving letter, experience letter, Form 16, payslips.

Leaving a US job instead?

The US side of the site is written separately

These India pages are written for Indian labour and tax law. If you were laid off by a US employer — including on an H-1B — the rules, the deadlines and the vocabulary are all different, and the pages below cover that side instead.

Build my US layoff plan US severance packages Laid off vs fired (US)H-1B and work visa layoffs US WARN notice tracker US unemployment benefits

Returning to India after a US layoff touches both sets of rules — the US pages for the exit, these pages for what happens once you are employed here again.

Frequently asked questions

What is full and final settlement?+

Full and final settlement (often shortened to FnF or F&F) is the closing account between you and your employer when you leave a job in India. It brings together everything still owed in both directions: unpaid salary up to your last working day, encashment of unused earned leave, gratuity if you qualify, any pending bonus or reimbursements, and your employer's deductions such as notice shortfall, unreturned assets or outstanding advances. The settled figure is normally issued as a written FnF statement that you are asked to sign.

What is included in a full and final settlement?+

A typical FnF includes salary for the days worked in your final month, encashment of accumulated earned leave, gratuity where you meet the eligibility conditions, any declared bonus or incentive still due, and reimbursement of approved expenses. Set against that are legitimate deductions: tax deducted at source, notice period shortfall if you left early, company loans or advances, and the value of unreturned laptops, phones or ID cards. Your provident fund balance is not part of FnF — it sits with the EPFO and is withdrawn or transferred separately.

How long does full and final settlement take?+

There is no single deadline covering the whole settlement, and this is the most common misreading. Section 17(2) of the Code on Wages, 2019 — in force since 21 November 2025 — requires WAGES to be paid within two working days where an employee is removed, dismissed, retrenched or resigns. That is your unpaid salary for days worked. It is not a two-day deadline for the entire FnF: gratuity, leave encashment, bonus, reimbursements and notice pay each run on their own footing — gratuity on its own statutory timeline, most of the rest on what your contract and your employer's policy provide. So the two-day rule is a strong basis for chasing your final wages, and a weaker one for chasing the whole settled figure. The appropriate Government may also prescribe a different limit where it considers that reasonable, and in practice many employers still run a 30-to-45-day payroll cycle.

What if my full and final settlement is not received?+

Start in writing. Email HR and payroll asking for a dated FnF statement and the reason for the delay, and keep the thread — a written record is what every later step depends on. If that does not move it, escalate internally to your HR head or your employer's grievance mechanism, again in writing. If it is still unpaid, the next route is the labour authorities for your state. Gratuity has its own forum, and which one depends on when you left: for an exit on or after 21 November 2025 it is the competent authority appointed under section 58 of the Code on Social Security 2020, with disputes determined under section 56; for an earlier exit it was the controlling authority under the Payment of Gratuity Act 1972. Take advice on which forum fits your case before filing.

Can an employer deduct notice pay from full and final settlement?+

Employers commonly do recover notice shortfall from the FnF when an employee leaves before serving the full notice stated in their contract, and most contracts expressly permit it. Whether a particular deduction is enforceable turns on what your contract says, what your employer's policy allows, and the rules on permitted deductions that apply to your establishment. If the amount looks wrong, ask for the per-day rate and the pay component it was calculated on in writing — that is usually where the disagreement actually is.

Do I have to sign the FnF statement to get my relieving letter?+

Many employers release the relieving letter and the settlement together, which is why people sign the statement without reading it. You are entitled to see the breakdown first. Ask for the itemised FnF statement, check the leave balance and the deductions against your own records, and raise any disagreement in writing before you sign. If you sign and later dispute an amount, the signed statement is the document your employer will point to.

How is full and final settlement calculated?+

Component by component, not as one formula. Unpaid salary is your day rate multiplied by the days worked in the final month. Leave encashment is your encashable leave balance at whatever divisor your policy uses. Gratuity applies the 15/26 formula with the six-month rounding rule, but only once you clear the qualifying-service test first. Against those, your employer sets notice shortfall, outstanding advances, the value of unreturned assets, and TDS. The settled figure is the net. Working each line separately is also the only way to find the one that is wrong.

Is gratuity part of full and final settlement?+

Yes — gratuity is normally paid as part of the settlement where you qualify for it, and it should appear as its own line on the statement rather than being folded into a single figure. Eligibility is a separate question from the amount: you have to clear the continuous-service test before the formula applies at all, which is why the gratuity eligibility checker comes before the gratuity calculator in the exit file.

Is provident fund part of full and final settlement?+

No. Your PF balance is held by the EPFO, not by your employer, and it is withdrawn or transferred on its own timeline through the EPFO's own process. An employer who describes your PF as part of the settlement is describing their paperwork, not where the money sits. Treat it as a separate decision — withdrawing and transferring have different tax and compounding consequences.

Is GST payable on notice pay recovery?+

No. Notice pay recovered by an employer from a departing employee is not consideration for a supply, so GST is not payable on it. If a deduction on your statement includes a GST component on the notice recovery, that is worth querying in writing with the amount and the rate applied.

How is full and final settlement taxed in India?+

Not as a single block. Gratuity, leave encashment, retrenchment compensation and VRS each carry their own exemption, and each exemption runs on its own least-of test with its own ceiling — so two components of identical size can be taxed completely differently. Notice pay is treated separately again. The exit tax calculator splits a settlement into exempt and taxable parts and shows the test it applied to each, which is what lets you check the TDS your employer deducted.

What documents should I collect before my last working day?+

The relieving letter, the experience or service certificate, your final payslips, the itemised FnF statement, Form 16 for the year, and confirmation that company assets were returned. Collect them while you still have a working email address and a manager who replies — extracting a Form 16 or a relieving letter from a company you left eight months ago is a much harder job than asking for it in your last week.

Your figures never leave this device. Every calculation on these pages runs in your browser, results are stored only in this browser's local storage, and nothing you enter is sent to us or to any analytics service. Clearing your exit file deletes it permanently — we hold no copy.

Sources for the figures on this page

Working days within which wages must be paid after removal, dismissal, retrenchment or resignation
Code on Wages 2019, s.17(2), in force from 21 November 2025. The appropriate Government may prescribe a different time limit.
View sourceChecked 2026-08-11
Forum for a gratuity dispute, for an exit on or after 21 November 2025 — the competent authority, not the controlling authority
Code on Social Security 2020, s.56 (determination of amount of gratuity: employer must determine and notify the employee and the competent authority, pay within thirty days, pay simple interest on delay; disputes determined by the competent authority; appeal within sixty days, extendable by sixty) read with s.58 (appointment of the competent authority by the appropriate Government). For exits before 21 November 2025 the equivalent route was the controlling authority under the Payment of Gratuity Act 1972.
View sourceChecked 2026-08-14
Is GST payable on notice pay recovery by an employer?
CBIC Circular No. 178/10/2022-GST dated 3 August 2022 — forfeiture of salary or recovery of notice pay is a deterrent, not consideration for tolerating an act, and is therefore not a taxable supply
View sourceChecked 2026-08-11

Written and reviewed by Deepak Middha, Chartered Accountant (ICAI, India) and founder of LayoffNext.

Legal and tax positions last checked 15 August 2026Editorial standards

Deepak MiddhaFounder of LayoffNext

Deepak Middha is the founder of LayoffNext and a Chartered Accountant (ICAI, India). A U.S. immigrant with nearly 20 years of experience — and 17 years in hedge fund and private equity administration, including as Vice President of Fund Accounting at NAV Fund Administration Group and Associate Director of Private Equity and Real Estate at SS&C Technologies — he builds free, plain-language layoff tools and guides for employees, H-1B workers, and immigrant families.

Updated August 15, 2026

About Deepak LinkedIn Editorial Standards Methodology View All Articles