Quick Answer: A full and final settlement (FnF) is the total amount your employer pays you when you leave a job, after adjusting all dues and deductions. The formula is FnF = Unpaid Salary + Leave Encashment + Gratuity + Bonus/Incentives − Notice Pay Recovery − Other Deductions (TDS, loans, advances). For example, if you are owed ₹40,000 unpaid salary, ₹25,000 leave encashment and ₹60,000 gratuity, with ₹20,000 notice recovery and ₹15,000 TDS, your FnF is 40,000 + 25,000 + 60,000 − 20,000 − 15,000 = ₹90,000. Under the new Labour Codes (effective 21 November 2025), FnF must be paid within two working days of your last day. Use the calculator below to estimate yours.
Full and Final Settlement Calculator
What Is Full and Final Settlement?
Full and final settlement (also called FnF or “final settlement”) is the process of clearing all financial dues between you and your employer when your employment ends — whether you resign, are terminated, or retire. It adds up everything the company owes you (pending salary, leave encashment, gratuity, bonus) and subtracts everything you owe the company (notice pay recovery, loans, advances, tax). The net figure is paid out along with your relieving letter and experience certificate.
Full and Final Settlement Formula
FnF = Unpaid Salary + Leave Encashment + Gratuity + Bonus − Notice Pay Recovery − TDS & Other Deductions
Each component is calculated separately first, then combined.
Components of FnF (Additions)
| Component | How it is calculated |
|---|---|
| Unpaid / pending salary | (Monthly salary ÷ days in month) × days worked in the final month, plus any unpaid previous month. |
| Leave encashment | (Basic + DA ÷ 30) × unused earned/privilege leave days. See our Leave Encashment Calculator. |
| Gratuity | (Last drawn basic + DA × 15 × years of service) ÷ 26, payable after 5 years. See our Gratuity Calculator. |
| Bonus / incentives | Any declared but unpaid statutory bonus, performance pay, or pending reimbursements. |
Components of FnF (Deductions)
| Deduction | Notes |
|---|---|
| Notice pay recovery | Charged if you do not serve full notice. See our Notice Period Buyout Calculator. |
| TDS | Tax deducted on taxable settlement components. Estimate with our TDS on Salary Calculator. |
| Loans / salary advances | Any outstanding company loan or advance is recovered in full. |
| Asset / IT recovery | Unreturned laptop, ID card, or other company assets may be charged. |
Worked Example
Rahul resigns after 6 years. His dues and deductions are:
- Unpaid salary (18 days) = ₹45,000
- Leave encashment (12 days) = ₹24,000
- Gratuity (6 years) = ₹1,03,846
- Bonus pending = ₹10,000
- Total additions = ₹1,82,846
- Notice pay recovery (10 days) = ₹15,000
- TDS + loan = ₹22,000
- Total deductions = ₹37,000
Net FnF = ₹1,82,846 − ₹37,000 = ₹1,45,846
FnF Payment Timeline (New Labour Codes 2025)
| Rule | Timeline |
|---|---|
| Code on Wages, 2019 (effective 21 Nov 2025) | Within 2 working days of last working day |
| Common company practice | 30–45 days from last working day |
| If delayed | You can send a legal notice / approach the labour commissioner |
Frequently Asked Questions
How is full and final settlement calculated in India?
FnF = Unpaid Salary + Leave Encashment + Gratuity + Bonus − Notice Pay Recovery − TDS and other deductions. Each component is computed separately and then netted off to get the final payable amount.
What is included in a full and final settlement?
Additions: pending salary, earned leave encashment, gratuity (after 5 years), and any declared bonus or pending reimbursements. Deductions: notice pay recovery, TDS, outstanding loans/advances, and unreturned asset costs.
How long does FnF take to be paid in India?
Under the Code on Wages, 2019 (effective 21 November 2025), FnF should be paid within two working days of the last working day. In practice, many companies still take 30–45 days.
Is full and final settlement taxable?
Parts of it are. Unpaid salary and most bonuses are fully taxable. Gratuity is exempt up to ₹20 lakh, and leave encashment has its own exemption limits. TDS is deducted on the taxable portion.
Is gratuity always part of FnF?
Gratuity is included only if you have completed at least 5 years of continuous service (with some exceptions like death or disability). Below 5 years, gratuity is usually not payable.
Can a company deduct notice pay from FnF?
Yes. If you do not serve your full notice period, the company can recover the notice pay (notice period buyout) by deducting it from your final settlement.
What if my employer does not pay FnF on time?
You can send a formal reminder, then a legal notice, and finally approach the labour commissioner or file a claim. Delayed wages can attract penalties on the employer under the Labour Codes.
Conclusion
Your full and final settlement is simply everything the company owes you minus everything you owe back. Calculate each component — pending salary, leave encashment, gratuity, and bonus on the plus side; notice recovery, TDS, and loans on the minus side — then net them off. Use the calculator above to get a quick estimate, and check your individual gratuity, leave encashment, and notice-pay figures with our dedicated tools before signing your FnF statement.
Related Calculators
- Notice Period Buyout Calculator
- Gratuity Calculator
- Leave Encashment Calculator
- TDS on Salary Calculator (India)
- HRA Exemption Calculator