Understanding Full and Final Settlement Calculations and Compensation Components

Hi Seniors,

One of our employees resigned on the 10th and provided notice until the 23rd. He worked from the 1st to the 23rd. Our policy stipulates a one-month notice period.

Regarding full and final adjustment, please clarify who is responsible for payment and how many days will be compensated.

Your prompt response is appreciated.

Thanks,
Sandeep

Dear Mr. Sandeep,

No problem, if LTA or Bonus is a part of CTC, then you can deduct the remaining amount for 7 days through these compensation components. If there is any confusion, please revert to me.

Thank you.

To prepare the full salary for 23 days and deduct the amount for 16 days from the 23 days' salary. This is because he has worked until the 23rd, and if he is covered under the EPF or ESI act, you have to deposit the EPF and ESI amount for 23 days. Suppose his net salary is 10,000.00.
- 23 days' salary = 7,419/-
- 16 days' salary = 5,161/-
- F & F amount = 2,258/-
He had served only a 14-day notice period.

Thanks Anuu and akpk for the clarification. There is no adjustment of LTA and Bonus. So, we are paying him 7 days' salary as he has served a 14-day notice period and worked for 23 days.

First, check your company's appointment letter terms and conditions. The notice period is always payable based on the basic salary. You should deduct 16 days' worth of basic salary. For example, if the basic salary is $10,000, then the calculation would be $10,000 / 30 * 16. Thank you.