{"id":5835,"date":"2024-05-21T11:36:12","date_gmt":"2024-05-21T06:06:12","guid":{"rendered":"https:\/\/razorpay.com\/learn\/?p=5835"},"modified":"2024-05-22T15:40:04","modified_gmt":"2024-05-22T10:10:04","slug":"full-and-final-settlement-fnf","status":"publish","type":"post","link":"https:\/\/razorpay.com\/payroll\/learn\/full-and-final-settlement-fnf\/","title":{"rendered":"Full and Final Settlement (FnF) &#8211; All You Need to Know"},"content":{"rendered":"<p>Full and final settlement<span style=\"font-weight: 400;\"> is the process of calculating all the dues payable to an employee who resigns, retires, or is removed by the management. The settlement process is not just limited to the salary drawn by the employee but also deductions.<\/span><\/p>\n<p>Digital-first solutions like RazorpayX Payroll offer features like automatic, error-free and instant full and final settlement calculations with just one click.<\/p>\n<p style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/payroll.razorpay.com\/signup?r=blog_cta_full_and_final_settlement\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Demo RazorpayX Payroll for Free<\/a><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69f1b52599bff\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69f1b52599bff\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/razorpay.com\/payroll\/learn\/full-and-final-settlement-fnf\/#What-is-full-and-final-settlement\" >What is full and final settlement?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/razorpay.com\/payroll\/learn\/full-and-final-settlement-fnf\/#What-are-the-rules-for-FnF-settlement\" >What are the rules for FnF settlement?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/razorpay.com\/payroll\/learn\/full-and-final-settlement-fnf\/#Policy-for-full-and-final-settlement\" >Policy for full and final settlement<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/razorpay.com\/payroll\/learn\/full-and-final-settlement-fnf\/#Major-components-activities-included-in-the-full-and-final-settlement\" >Major components &amp; activities included in the full and final settlement<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/razorpay.com\/payroll\/learn\/full-and-final-settlement-fnf\/#Financial-Clearance\" >Financial Clearance<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/razorpay.com\/payroll\/learn\/full-and-final-settlement-fnf\/#1-OutstandingUnpaid-Salary\" >1. Outstanding\/Unpaid Salary<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/razorpay.com\/payroll\/learn\/full-and-final-settlement-fnf\/#2-Unavailed-Leaves-and-Bonus\" >2. Unavailed Leaves and Bonus<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/razorpay.com\/payroll\/learn\/full-and-final-settlement-fnf\/#3-Employee-Provident-Fund-EPF-or-PFPension\" >3. Employee Provident Fund (EPF or PF)\/Pension<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/razorpay.com\/payroll\/learn\/full-and-final-settlement-fnf\/#4-Gratuity\" >4. Gratuity<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/razorpay.com\/payroll\/learn\/full-and-final-settlement-fnf\/#5-Deductions-from-Full-and-Final-Settlement\" >5. Deductions from Full and Final Settlement<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/razorpay.com\/payroll\/learn\/full-and-final-settlement-fnf\/#6-Leave-Encashment\" >6. Leave Encashment<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/razorpay.com\/payroll\/learn\/full-and-final-settlement-fnf\/#IT-Clearance\" >IT Clearance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/razorpay.com\/payroll\/learn\/full-and-final-settlement-fnf\/#HR-Clearance\" >HR Clearance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/razorpay.com\/payroll\/learn\/full-and-final-settlement-fnf\/#Admin-Clearance\" >Admin Clearance<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/razorpay.com\/payroll\/learn\/full-and-final-settlement-fnf\/#When-does-the-full-and-final-settlement-take-place\" >When does the full and final settlement take place?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/razorpay.com\/payroll\/learn\/full-and-final-settlement-fnf\/#Full-and-final-settlement-payslip-format\" >Full and final settlement payslip format<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/razorpay.com\/payroll\/learn\/full-and-final-settlement-fnf\/#A-few-pointers-for-employers-to-keep-in-mind\" >A few pointers for employers to keep in mind:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/razorpay.com\/payroll\/learn\/full-and-final-settlement-fnf\/#Calculate-employee-full-and-final-settlement-with-RazorpayX-Payroll\" >Calculate employee full and final settlement with RazorpayX Payroll<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/razorpay.com\/payroll\/learn\/full-and-final-settlement-fnf\/#FAQs\" >FAQs<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What-is-full-and-final-settlement\"><\/span><span style=\"font-weight: 400;\">What is full and final settlement?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Whether an employee resigns from the job or is let go by the management, they are paid all the dues for their service till the last working day as <\/span>FnF or full and final settlement<span style=\"font-weight: 400;\">. This includes any additional earnings or deductions as well.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What-are-the-rules-for-FnF-settlement\"><\/span>What are the rules for FnF settlement?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In India, Full and Final Settlements are subject to legal regulations and guidelines. <a href=\"https:\/\/incometaxindia.gov.in\/pages\/acts\/payment-wages-act.aspx\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">The Payment of Wages Act<\/a> is a significant piece of legislation that governs this process. The Act outlines the timing and modes of wage payments, ensuring that employees are fairly compensated.<\/p>\n<p>Under the Act, employers are required to disburse Full and Final Settlements within a specific timeframe, typically within seven to ten days from the last working day. This legal requirement aims to safeguard employees&#8217; rights and provide them with timely access to their dues.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Policy-for-full-and-final-settlement\"><\/span>Policy for full and final settlement<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Accurate and well-maintained documentation is paramount during Full and Final Settlements. Here&#8217;s a list of essential documents that both employers and employees should be familiar with:<\/p>\n<ol>\n<li><strong>Resignation Letter:<\/strong> The departing employee&#8217;s formal resignation letter serves as the starting point of the process.<\/li>\n<li><strong>Offer Letter and Appointment Letter:<\/strong> These documents help in verifying terms of employment, job role, and salary details.<\/li>\n<li><strong>Attendance and Leave Records:<\/strong> Accurate attendance and leave records help calculate pending leave encashment.<\/li>\n<li><strong>Salary Slips:<\/strong> Salary slips provide a detailed breakdown of salary components, aiding in accurate calculations.<\/li>\n<li><strong>Tax-related Documents:<\/strong> Documents like <a href=\"https:\/\/razorpay.com\/payroll\/learn\/form-16\/\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Form 16<\/a> are vital for tax-related calculations.<\/li>\n<li><strong>Gratuity and Provident Fund Details:<\/strong> These records ensure accurate gratuity and PF calculations.<\/li>\n<li><strong>Expense Reimbursement Records:<\/strong> Reimbursement claims and receipts help finalize pending reimbursements.<\/li>\n<\/ol>\n<h2><span class=\"ez-toc-section\" id=\"Major-components-activities-included-in-the-full-and-final-settlement\"><\/span><span style=\"font-weight: 400;\">Major components &amp; activities included in the full and final settlement<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The <\/span>full and final settlement <span style=\"font-weight: 400;\">consists of clearances from various departments like IT, finance, HR, and admin. Also, it is important to understand which components to include while calculating the final dues payable to the employee. Let&#8217;s look at each of the activities in detail:<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Financial-Clearance\"><\/span><b>Financial Clearance<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">This involves any outstanding reimbursements, expenses on company cards. Following are the various components to calculate the final dues payable to the employee:<\/span><\/p>\n<h4><span class=\"ez-toc-section\" id=\"1-OutstandingUnpaid-Salary\"><\/span><b>1. Outstanding\/Unpaid Salary<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\">As per the <\/span><a href=\"https:\/\/clc.gov.in\/clc\/acts-rules\/payment-wages-0#Short%20title,%20extent,%20commencement%20and%20application\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\"><span style=\"font-weight: 400;\">Payment of Wages Act, 1936<\/span><\/a><span style=\"font-weight: 400;\">, the salary due for the previous month should be paid up to the 7th or 10th of the following month. But, when the employee resigns from a job, the salary due up to the date of resignation needs to be calculated.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Unpaid salary also includes the annual benefits payable to employees like LTA (leave travel allowance) or other arrears. Since these amounts are usually paid once in the year, the liability should be calculated up to the employee&#8217;s last working day.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The calculation of this will depend on your company\u2019s policy around benefits.\u00a0<\/span><\/p>\n<p><a href=\"https:\/\/razorpay.com\/payroll\/learn\/gross-salary-meaning\/\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\"><b>Recommended read: Gross Salary Meaning, Components &amp; Calculation<\/b><\/a><\/p>\n<h4><span class=\"ez-toc-section\" id=\"2-Unavailed-Leaves-and-Bonus\"><\/span><b>2. Unavailed Leaves and Bonus<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\">As per the provisions of the <\/span><a href=\"https:\/\/labour.gov.in\/sites\/default\/files\/Factories_Act_1948.pdf\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\"><span style=\"font-weight: 400;\">Factories Act, 1948<\/span><\/a><span style=\"font-weight: 400;\">, the amount of unavailed leaves and bonuses need to be cleared by the 7th or 10th of the following month after the resignation.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The leaves available to the employees are different from company to company depending on a company\u2019s policy. These leaves are usually called privilege leaves available for employees against continued service.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here again, the leave encashment policy varies from company to company and hence the calculation of this component will depend on it.<\/span><\/p>\n<p>Read more in our blog post <a href=\"https:\/\/razorpay.com\/payroll\/learn\/leave-encashment-calculation\/\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">&#8216;Leave Encashment Calculation.&#8217;<\/a><\/p>\n<p><span style=\"font-weight: 400;\">Similarly, bonuses can be awarded by the employer on special occasions or for exemplary performance by the employees. Any amount of the bonus awarded to the employee must also be paid.<\/span><\/p>\n<h4><span class=\"ez-toc-section\" id=\"3-Employee-Provident-Fund-EPF-or-PFPension\"><\/span><b>3. Employee Provident Fund (EPF or PF)\/Pension<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\">A portion is deducted from the employee&#8217;s salary every month, and the employer also contributes the same amount. This pool of funds is deposited by the employer as Provident Fund and Pension Fund for the employees and helps build a corpus.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Provident Fund is payable to all employees in confirmed service, while Pension is payable on completion of 10 years of service on <\/span>FnF settlement.<\/p>\n<p><span style=\"font-weight: 400;\">If the employee is resigning to join a new job, the PF\/Pension can be transferred to the new employer or paid to the employee. On retirement, the fund balance is payable to the employees.<\/span><\/p>\n<p><a href=\"https:\/\/razorpay.com\/payroll\/learn\/employee-provident-fund-epf-scheme\/\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\"><b>Read more about \u2018Employee Provident Fund\u2019 in this blog post<\/b><\/a><\/p>\n<h4><span class=\"ez-toc-section\" id=\"4-Gratuity\"><\/span><strong>4. Gratuity<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\">As per the <\/span><a href=\"https:\/\/clc.gov.in\/clc\/sites\/default\/files\/PaymentofGratuityAct.pdf\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\"><span style=\"font-weight: 400;\">Payments of Gratuity Act<\/span><\/a><span style=\"font-weight: 400;\">, gratuity is payable to an employee who has served the company for 4 years and 10 months or more. Any employee resigning from the job or being terminated after completion of this period is entitled to receive gratuity payment within 30 days. If there is any delay in payment of Gratuity during <\/span>FnF settlement <span style=\"font-weight: 400;\">beyond 30 days, interest is payable to the employee.<\/span><\/p>\n<p><a href=\"https:\/\/razorpay.com\/payroll\/learn\/what-is-gratuity\/\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\"><b>Read more about \u2018Gratuity &amp; its calculation\u2019 in this blog post<\/b><\/a><\/p>\n<h4><span class=\"ez-toc-section\" id=\"5-Deductions-from-Full-and-Final-Settlement\"><\/span><strong>5. Deductions from Full and Final Settlement<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span style=\"font-weight: 400;\">Any tax liability arising on the<\/span> FnF<span style=\"font-weight: 400;\"> amount is chargeable from the amount payable. <\/span><a href=\"https:\/\/razorpay.com\/payroll\/learn\/tax-deducted-at-source-tds\/\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\"><span style=\"font-weight: 400;\">TDS<\/span><\/a><span style=\"font-weight: 400;\"> is deductible from the components that are taxable under the Income Tax Act, 1961. Although, the amount paid for gratuity and unpaid leaves is exempt from TDS under the Income Tax Act.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"6-Leave-Encashment\"><\/span>6. Leave Encashment<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Leave encashment in Full and Final Settlement (FnF) refers to the process of converting unused earned leaves into a monetary payout when an employee is leaving the organization.<\/p>\n<p>The <a href=\"https:\/\/razorpay.com\/payroll\/learn\/leave-encashment-calculation\/\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">leave encashment amount<\/a> is calculated based on the employee&#8217;s daily wage or salary and the number of earned leaves they have accrued but not utilized. The formula for calculating leave encashment can vary based on company policies and labour laws in the specific region or country.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"IT-Clearance\"><\/span>IT Clearance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">This involves returning company assets such as laptop, monitor, keyboard or mouse &#8211; whatever asset was provided to the employee on the last working day. In case of any damage, the same can be recovered from the employee FnF.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Employee account is updated with resigned\/removed (whatever applicable) and email ID is deleted from the IT <\/span><span style=\"font-weight: 400;\">infrastructure<\/span><span style=\"font-weight: 400;\">.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"HR-Clearance\"><\/span><b>HR Clearance<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">There are various HR policies that vary from company to company related to joining bonus, L&amp;D, and notice period. Based on an employee\u2019s tenure or company policy the joining bonus or a company\u2019s latest bonus might be recovered in the FnF settlement.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Also, if the notice period falls short, the employee may\/may not have to pay the relevant amount in the FnF settlement.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Admin-Clearance\"><\/span><b>Admin Clearance<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">This involves getting the employee ID card or other related assets that are usually needed for entry\/access in the company.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"When-does-the-full-and-final-settlement-take-place\"><\/span><span style=\"font-weight: 400;\">When does the full and final settlement take place?<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">It is essential to note that an employee, whether resigning or being terminated, has the right to get all the dues settled within a reasonable timeframe. <\/span><span style=\"font-weight: 400;\">It is a common practice to finalise the process within 30-45 days from the employee\u2019s last working day.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If the employer fails to fulfil the <\/span>FnF settlement<span style=\"font-weight: 400;\"> requirements, the employee can contest it legally, and the employer will be liable to pay interest on all the dues as a penalty.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Full-and-final-settlement-payslip-format\"><\/span><span style=\"font-weight: 400;\">Full and final settlement<\/span><span style=\"font-weight: 400;\"> payslip format<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The <\/span>FnF settlement<span style=\"font-weight: 400;\"> letter is issued with reference to the resignation letter submitted by the employee. There is no set format for the FnF letter and sometimes companies just generate a payslip in place of the letter. The following details should form part of the payslip.<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Name of the employee<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Employee ID<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Date of Resignation<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Reason for leaving<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Details of <\/span>FnF settlement<span style=\"font-weight: 400;\"> amount<\/span><\/li>\n<\/ol>\n<h2><span style=\"font-weight: 400;\"><img decoding=\"async\" class=\"aligncenter wp-image-5843 size-large\" style=\"border: 3px solid #eeeeee; padding: 3px; margin: 3px;\" src=\"https:\/\/razorpay.com\/learn-content\/uploads\/2022\/02\/Payroll-01-584x1024.jpg\" alt=\"full and final settlement (FnF) format\" width=\"584\" height=\"1024\" srcset=\"https:\/\/d6xcmfyh68wv8.cloudfront.net\/learn-content\/uploads\/2022\/02\/Payroll-01-584x1024.jpg 584w, https:\/\/d6xcmfyh68wv8.cloudfront.net\/learn-content\/uploads\/2022\/02\/Payroll-01-171x300.jpg 171w, https:\/\/d6xcmfyh68wv8.cloudfront.net\/learn-content\/uploads\/2022\/02\/Payroll-01-876x1536.jpg 876w, https:\/\/d6xcmfyh68wv8.cloudfront.net\/learn-content\/uploads\/2022\/02\/Payroll-01-1168x2048.jpg 1168w, https:\/\/d6xcmfyh68wv8.cloudfront.net\/learn-content\/uploads\/2022\/02\/Payroll-01-scaled.jpg 1459w\" sizes=\"(max-width: 584px) 100vw, 584px\" \/><\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/learn-content\/uploads\/2022\/02\/FnF_Payslip.docx\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Download FnF Payslip Format in Word for Free<\/a><\/p>\n<p><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/learn-content\/uploads\/2022\/02\/11194-Demo-01-02-22.pdf\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Download FnF Payslip Format in PDF for Free<\/a><\/p>\n<h2><span class=\"ez-toc-section\" id=\"A-few-pointers-for-employers-to-keep-in-mind\"><\/span><span style=\"font-weight: 400;\">A few pointers for employers to keep in mind:<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">While computing the value of <\/span>FnF settlement<span style=\"font-weight: 400;\"> amount, the employers should keep the following points in mind:<\/span><\/p>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Clear records of all the correspondences with the employee should be maintained.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The settlement value must be calculated as per the governing laws.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">FnF settlement<span style=\"font-weight: 400;\"> should be made within a reasonable time.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">TDS should be deducted from the incomes that attract taxation.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Detailed calculations should be provided to the employee along with an <\/span>FnF settlement<span style=\"font-weight: 400;\"> payslip.<\/span><\/li>\n<\/ol>\n<h2><span class=\"ez-toc-section\" id=\"Calculate-employee-full-and-final-settlement-with-RazorpayX-Payroll\"><\/span><span style=\"font-weight: 400;\">Calculate employee full and final settlement with RazorpayX Payroll<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Now that you know about the full and final settlement process, isn\u2019t it a lot to do manually?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">With <\/span><a href=\"https:\/\/razorpay.com\/payroll\/hr-software\/\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\"><span style=\"font-weight: 400;\">RazorpayX<\/span><\/a><span style=\"font-weight: 400;\"> Payroll, you can leave all the tedious calculations related to <\/span>FnF settlement<span style=\"font-weight: 400;\"> to the software and focus on other important tasks. Everything from leave encashment to gratuity calculation is automatically calculated. All you need to do is input the number of leaves and salary.<\/span><\/p>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/payroll.razorpay.com\/signup?r=blogcta_fnf\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Start Your Forever Free Plan Now!<\/a><\/div>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">RazorpayX Payroll is an all-in-one HR software that takes care of:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Payroll compliances like PF, PT, TDS &#8211; both calculation &amp; filing<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Direct salary disbursals into employee bank accounts<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Employee Group Insurance\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Employee onboarding &amp; offer letter generation<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">And more!\u00a0<\/span><\/p>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/payroll\/?r=blog_cta\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Join 5000+ Leading Startups<\/a><\/div>\n<h5>Read more:<\/h5>\n<p><strong><a href=\"https:\/\/razorpay.com\/payroll\/\">Payroll Software<\/a><\/strong><\/p>\n<p><strong><a href=\"https:\/\/razorpay.com\/payroll\/what-is-payroll\/\">What is Payroll<\/a><\/strong><\/p>\n<p><strong><a href=\"https:\/\/razorpay.com\/payroll\/learn\/payroll-process\/\">Payroll Process<\/a><\/strong><\/p>\n<p><strong><a href=\"https:\/\/razorpay.com\/payroll\/learn\/payroll-management-system-software\/\">Payroll Management<\/a><\/strong><\/p>\n<p><strong><a href=\"https:\/\/razorpay.com\/payroll\/learn\/hris-human-resource-information-system\/\">HRIS<\/a><\/strong><\/p>\n<p><strong><a href=\"https:\/\/razorpay.com\/payroll\/leave-attendance-management\/\">Leave Attendance Management<\/a><\/strong><\/p>\n<p><strong><a href=\"https:\/\/razorpay.com\/payroll\/attendance-management-system\/\">Attendance Management System<\/a><\/strong><\/p>\n<p><strong><a href=\"https:\/\/razorpay.com\/payroll\/hr-software\/\">HR Software<\/a><\/strong><\/p>\n<h3><span class=\"ez-toc-section\" id=\"FAQs\"><\/span><span style=\"font-weight: 400;\">FAQs<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\t\t\t<div id=\"rank-math-rich-snippet-wrapper\" class=\"\">\n\n\t\t\t\t\n\t\t\t<\/div>\n\t\t\n","protected":false},"excerpt":{"rendered":"<p>Full and final settlement is the process of calculating all the dues payable to an employee who resigns, retires, or is removed by the management.<\/p>\n","protected":false},"author":151156494,"featured_media":10923,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3404,3476],"tags":[3708],"class_list":{"0":"post-5835","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-payroll","8":"category-payroll-glossary","9":"tag-full-and-final-settlement"},"_links":{"self":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/5835","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/users\/151156494"}],"replies":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/comments?post=5835"}],"version-history":[{"count":21,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/5835\/revisions"}],"predecessor-version":[{"id":10898,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/posts\/5835\/revisions\/10898"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/media\/10923"}],"wp:attachment":[{"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/media?parent=5835"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/categories?post=5835"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/learn.razorpay.in\/learn\/wp-json\/wp\/v2\/tags?post=5835"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}