Enter salary, leave balance, service, and notice period to see an employee's full and final (F&F) settlement — pro-rated salary, leave encashment, gratuity, and notice recovery, netted into one payout.
Built for HR teams running employee exits — resignation, termination, or retrenchment.
All figures are monthly, in ₹.
Advances, loans, or unreturned assets
Net F&F payable
₹0
Wages, leave encashment, and bonus are due within 2 working days of the last working day (Section 17(2), Code on Wages, 2019). Gratuity has its own 30-day timeline under the Payment of Gratuity Act.
A full and final settlement combines five separate calculations — salary, leave, gratuity, notice recovery, and deductions — each with its own formula and eligibility rule, and it now has to close in 2 working days instead of the 30–45 days most Indian companies were used to before the Labour Codes took effect. Missing the fixed-term gratuity change, using the wrong leave divisor, or forgetting to net off notice recovery is a common source of exit disputes. Clan's payroll plans track leave balances, gratuity eligibility, and notice periods automatically, so an exit settlement starts from the correct numbers.
| Component | Formula | Notes |
|---|---|---|
| Pro-rated salary | (Gross ÷ 26) × days worked | Some companies use 30 calendar days instead of 26 working days — check your policy. |
| Leave encashment | (Basic + DA ÷ 26) × pending days | Usually earned/privilege leave only, not casual or sick leave. |
| Gratuity | (Basic + DA) × 15/26 × years of service | Needs 5+ years' service (1 year for fixed-term hires from 21 Nov 2025). Capped at ₹20 lakh. |
| Notice recovery | (Gross ÷ 30) × shortfall days | Deducted only when notice served is less than the required notice period. |
| Bonus / incentive | As accrued | No fixed statutory formula — enter the amount owed per contract or policy. |
| Other deductions | Manual entry | Salary advances, loans, and unreturned company assets. |
Divisors and leave policy vary by company; this calculator uses the most common Indian payroll convention. Confirm against your own offer letter or HR policy before finalizing a settlement.
Pro-rated salary for days worked in the exit month, encashment of pending earned leave, gratuity if the employee is eligible, and any accrued bonus — minus notice period shortfall recovery and other deductions like salary advances, loans, or unreturned assets.
Two working days. Section 17(2) of the Code on Wages, 2019 made this mandatory when the Labour Codes took effect on 21 November 2025, covering resignation, termination, retrenchment, and closure. Gratuity keeps a separate 30-day timeline under the Payment of Gratuity Act, 1972.
Only if the employee completed 5 or more years of continuous service — except fixed-term employees whose contract started on or after 21 November 2025, who qualify after just 1 year under the amended Labour Codes. Below the applicable threshold, gratuity is zero in the settlement.
(Gross monthly salary ÷ 30) × shortfall days, where shortfall days is the notice period required by the offer letter minus the days actually served. If the employee serves the full notice, or the employer waives it, recovery is zero.
Only the pending earned leave (privilege leave) balance, typically at (Basic + DA ÷ 26) × pending days. Casual leave and sick leave usually lapse at exit and are not encashed — this varies by company leave policy.
This tool combines every exit-time component into one net payout. For just the gratuity number, use the gratuity calculator. For the monthly PF and ESI contribution split, use the PF and ESI calculator. For a full leave ledger before resigning, use the leave balance calculator.
