F&F settlement or Full and Final settlement is a procedure that is required to be followed by the employer at the time of employees resignation or last working day. FnF settlement systems include recovery of leave encashment, pending dues and notice pay so that the final settlement slip is generated. FnF is based on the guidelines, terms, and conditions at the time of appointment. A condition is set for the FnF settlement that the final clearance will be done between 30 to 45 days from the employees last working day.
F&F settlement process is done by the employer when an employee quits the job and this FnF is calculated by checking the all the salary dues, leave dues and the employee receives a sum after all the deductions are made. While calculating the FnF amount different aspects are taken into consideration such as
Unpaid salary - salary for the working days between resignation and last working day along with DA and TA.
Deductions - include PF due, profession tax if applicable, income tax and compensation for not working during the notice period.
Bonus & non-availed leaves – payment of non-availed leaves ( privilege leaves) as per the Factories Act 1948 section 79 (11).
Pension - if eligible for pension services after retirement.
Gratuity - a lump sum of money is given to the employee by an employer for his/her valuable services to the organization ( gratuity is only applicable to employees who completed 5 years of service in the organization).
The F&F process is done by submitting no due certificate from the organization and clearance form signed by the employee to the HR department. Advances took before the salary can be adjusted during the F&Fsettlement process. An employee must complete the notice period in terms of the contract to avail F&F settlement.
All rights reserved © 2020 Wisdom IT Services India Pvt. Ltd