No Dues Certificate Format
A no dues certificate confirms that a departing employee has cleared all financial and material obligations to the company — such as loans, advances, or company property — and that the company has no outstanding claim against the employee at the time of exit.
In India, HR typically issues this certificate as part of the exit clearance process, once all relevant departments (finance, IT, admin, and the employee's reporting manager) have confirmed there are no pending dues, ensuring the full and final settlement and relieving letter can be processed without complication.
No Dues Certificate — sample format
Copy the template below and replace the [bracketed] fields.
[Company Letterhead]
Date: [Date]
NO DUES CERTIFICATE
This is to certify that [Employee Name], holding Employee ID [Employee ID], who was employed as [Designation] in the [Department] department from [Date of Joining] to [Last Working Day], has completed all exit clearance formalities.
Based on confirmation received from the concerned departments, it is confirmed that:
- All company property, including [laptop, ID card, access card, mobile device, documents], has been returned in satisfactory condition.
- All salary advances, loans, or reimbursements taken from the Company, if any, have been settled/adjusted in full.
- There are no pending dues owed by the employee to the Company as of the date of this certificate.
This certificate is issued for the purpose of [state purpose, e.g. "processing full and final settlement / for the employee's records"].
For [Company Name],
_______________________
[Authorised Signatory Name]
[Designation — HR/Finance]
[Company Name]
[Company Seal, if applicable]
What to include
- ✓ Employment tenure summary — confirms the employee's designation and dates for accurate cross-referencing with other exit documents
- ✓ Asset return confirmation — explicitly states company property has been returned in satisfactory condition
- ✓ Financial dues clearance — confirms loans, advances, and reimbursements have been settled or adjusted
- ✓ No pending dues declaration — the operative statement that unblocks full and final settlement processing
- ✓ Stated purpose — ties the certificate to its intended use, usually as a precondition for settlement or relieving letter issuance
Legal notes (India)
- § A no dues certificate is an internal clearance document, not itself a statutory filing, but it is often a practical precondition companies set internally before releasing full and final settlement — this internal process should not be used to delay payment beyond the statutory timeline under the Payment of Wages Act, 1936.
- § If the employee disputes any deduction recorded as a 'due' (e.g. disputed loan recovery or alleged property damage), the employer should resolve this separately and cannot use an unresolved dispute to indefinitely withhold undisputed wages or statutory dues.
- § For departments confirming clearance (IT, admin, finance), maintaining a documented sign-off trail protects the company in case a former employee later disputes deductions made from their final settlement.
Frequently asked questions
Can a company withhold salary if a no dues certificate is not completed?
Who is responsible for signing off on a no dues certificate?
Is a no dues certificate the same as a relieving letter?
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