Exit
Full and final settlementF&F
Full and final settlement is the last payment to a leaving employee, covering pending salary, leave encashment, gratuity and bonus, less notice-period shortfall and recoveries.
F&F computes everything owed and everything recoverable at exit: salary till the last day, encashment of unused earned leave, gratuity if eligible, pro-rata bonus, reimbursements, minus notice pay shortfall, loans, advances and asset costs.
Under the new wage code it must be paid within two working days of the last day.
In Indian payroll
Gratuity is tax-free up to ₹20 lakh and leave encashment up to ₹25 lakh for private employees, so F&F needs its own tax treatment rather than being run as a normal month.
What is Full and final settlement?
Full and final settlement is the last payment to a leaving employee, covering pending salary, leave encashment, gratuity and bonus, less notice-period shortfall and recoveries.
Why does Full and final settlement matter in Indian payroll?
Gratuity is tax-free up to ₹20 lakh and leave encashment up to ₹25 lakh for private employees, so F&F needs its own tax treatment rather than being run as a normal month.
In Kuzhu
The Payroll module in Kuzhu is where Full and final settlement is handled, on the same employee record as everything else.
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