What is the full & final settlement?


When an employee decides to resign from the job and HR suggests the separation process undergo and at that time full and final settlement process happens. Your company decides whether the process shall begin after the employee is relieved or immediately after the resignation is handed over.

How Much:

In this process, employees are paid a salary for their last working month including any additional bonuses and tax deductions.


HR formalities such as exit interviews, feedback chains are also a part of the full and final settlement of the employee. The procedure of paying the employee and settling the calculation during the resignation process is called the final settlement process of the employee.


It may take up to a month or more than that as per the process of the company to be completed since it’s a lengthy process that requires vast knowledge and experience for the same.


Mr. Rajen submitted his resignation on 23 rd July 2021 and was given a notice period of 1 month.

Absent during notice period: 19.08.21 to 20.08.21

Salary credit date: 5th of every month

Monthly Net Salary: 21000

Salary for July: 21,000 (31Days)

Paid days for August = (From 1st Aug.- 22nd Aug. )- 2 days absent

                                     = 22-2 = 20 Days

Salary for August: 13548 (For 20 days)

Pending Bonus: 7,500, Advance Salary Taken: 12,000


Full & final Settlement Amount

=July Salary + Salary for August (notice period) + Bonus - Advance Salary Taken

=(21000 + 13548 + 7500) - 12000


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