Struggling with Employee Full and Final Settlements? Need Help with Forms and Process

Hi All,

Can anybody provide me with full and final settlement forms? Actually, I don't have any idea how to make the full and final settlement of employees.

Thanks,
Vanita

Hi Vanita,

During the preparation of the Full & Final settlement of an employee, we have to keep in mind the payable salary and total deductions. In the payment, we have to consider the salary status, the leave status, and any payable bonuses. On the other hand, in the deduction part, we need to account for any advances taken, Notice period recovery if applicable, and any other liabilities the employee has with the organization.

For example, if an employee's gross monthly salary is 10,000 Rs and he resigns on the 1st of July with the notice period ending on the 31st of July as his last working day, and he has 15 earned leaves in his account, then while preparing the Full & Final statement, we have to pay him the complete month's salary, the earned leave amount, and any applicable bonuses as per the HR policy.

On the deduction side, we need to consider the PF amount, ESI deductions, and any applicable Notice period recovery.

I hope this clarification is helpful.

Regards,
Amit Seth

Hi,

I have one query regarding "full & final." My organization says that only a bonus is given, but no ex-gratia is provided for the current year for a departing candidate. Is that right (rule)?

Regards,
Sandeep

Hi Deepa,

Nowadays, most companies fix a bonus amount instead of calculating it separately and include it in one's CTC. This fixed bonus amount is termed as Ex-Gratia, which is paid at the time of Deepawali on a pro-rata basis.

Dear Sandeep,

The company should pay the Ex-Gratia to resigned employees during the preparation of their Full & Final settlement on a pro-rata basis. It might be a company policy, but most companies do pay it as well.

Regards,
Amit Seth

Hi everyone,

Good formats posted, really appreciable. Can anyone help me out with the staff settlement or clearance form?

Regards,
Rakhi