Full and final settlement calculator
Build an F&F statement for an exit in India: salary for days worked, leave encashment, notice period recovery or pay, gratuity, pending reimbursements and bonus, less advances, asset dues, statutory deductions and an estimated TDS. Every line shows its formula and whether it is taxable, and the statement prints cleanly.
Exit details
Settlement statement
Fill in the exit details and the statement updates as you type.
How this is calculated
Each line of the statement is one of the standard FnF components. Every base and divisor is a field on the page; change it to match your policy.
Payable to the employee
- Salary for the final month = monthly gross × days worked ÷ divisor, where the divisor is the calendar days in that month (default) or a fixed 30. Days worked defaults to the date of the last working day and is capped at the divisor. Taxable as salary.
- Leave encashment = unused encashable days × (basic + DA, or gross) ÷ 30 or 26. Exempt on leaving under section 10(10AA) up to ₹25,00,000 lifetime for non-government employees (as of 1 November 2026); anything above is shown as taxable. The tool cannot know encashment received from earlier employers, so it treats the whole limit as available.
- Notice pay (only when the employer releases the employee early) = shortfall days × base ÷ 30. Taxable as salary.
- Gratuity = (basic + DA) × 15⁄26 × completed years, with more than six months in the final year rounding up, included automatically at 5 or more completed years and capped at ₹20,00,000 under the Payment of Gratuity Act (as of 1 November 2026). Exempt under section 10(10) up to the same limit. Whether 4 years and 240 days qualifies is contested; the "include regardless" option covers that case.
- Pending reimbursements are approved expense claims and are not salary, so not taxable. Bonus or incentive is taxable as salary.
Recovered from the employee
- Notice period shortfall = (contract notice days − days served) × base ÷ 30, when the employee leaves early and the employer recovers. If the employer waives it, nothing is recovered. The tax treatment of a recovery is unsettled: tribunal decisions have gone both ways, and the usual Form 16 position is that it does not reduce taxable salary, which is what the statement assumes.
- Advances, asset dues and other recoveries are entered at the documented amounts.
- Statutory deductions on the final salary (employee PF at 12% of basic + DA, professional tax, ESI at 0.75% where applicable) are entered as one figure because the PF wage ceiling (₹25,000 from 17 September 2026) and state PT slabs vary; see the EPF ceiling note.
- TDS estimate = your chosen marginal rate × the taxable lines (final salary, bonus, notice pay received, and any leave encashment or gratuity above its exemption). It is an estimate: the real figure comes from the year's TDS working with the regime, declarations and earlier months' deductions.
Net payable = total payable − total recoveries. A negative figure means the employee owes the company, which is common when a long notice period is bought out.
ZekoHR runs the exit as a checklist and the FnF as a payroll run: the last working day, leave balance, notice served, gratuity eligibility and pending expense claims are already on the employee's record, so the statement is generated rather than typed. See payroll and exits → For the process around it, read offboarding and full and final settlement done properly.
Common questions
Within how many days must the full and final settlement be paid?
The Code on Wages, 2019, in force since 21 November 2025, requires wages due on resignation, removal, retrenchment or termination to be paid within two working days of the last day (section 17(2)). Central rules were finalised in 2026 and state rules have been notified through the year, so the old 30 to 45 day practice no longer has legal cover for the wages part. Gratuity must be paid within 30 days of becoming due under the Gratuity Act. Plan the FnF before the last working day, not after it.
Is notice period recovery deducted before or after tax?
It is unsettled. Some income-tax tribunal decisions have held that salary recovered as notice pay was never received and so should not be taxed; the department's usual position, and what most Form 16s reflect, is that the recovery does not reduce taxable salary. The statement follows the conservative Form 16 position. If a new employer reimburses the buyout, that reimbursement is taxable in the employee's hands.
Is the F&F amount taxable?
Line by line. Final salary, bonus and notice pay received are taxable as salary. Leave encashment on leaving is exempt up to ₹25 lakh (lifetime, non-government) and gratuity up to ₹20 lakh; the excess is taxable. Reimbursements of genuine business expenses are not income. The employer deducts TDS on the taxable lines in the month of settlement, which is why the net figure can look lower than expected.
Can the company deduct the cost of an unreturned laptop?
Generally yes, if the asset was issued against a signed acknowledgement and the value is documented (the Payment of Wages Act permits deductions for loss of property entrusted to the employee, with notice and a chance to explain). Deduct the depreciated or agreed value, not the invoice price, and keep the paperwork. Deductions without a basis are the commonest cause of FnF disputes.
What if the employee has taken more leave than accrued?
Set unused leave to 0 and enter the excess days' pay (days × per-day rate) under "other recovery". Whether excess leave can be recovered depends on the policy the employee signed; if the policy credited leave upfront with no recovery clause, the company may have no basis to claw it back. Use the pro-rata leave calculator to work out what had actually accrued to the exit date.
Does the statement include PF withdrawal or pension?
No. The PF balance sits with the EPFO, not the employer, and is withdrawn or transferred by the employee through the UAN portal after the exit date is marked. The employer's part is to deposit the final month's contribution and update the date of exit in ECR; neither appears on the FnF statement.