Notice Period & FnF Settlement Calculator

How full & final settlement is calculated

Full and final (FnF) settlement is the amount an employer pays an employee after their last working day, covering every due that hasn’t yet been paid. It typically has four parts. First, pending salary for days already worked in the exit month, usually computed as gross salary divided by 30 (or the days in that month) and multiplied by the number of unpaid days. Second, encashment of unused earned/privilege leave, valued at Basic + DA per day (not full gross), since leave encashment is treated as a Basic-linked benefit in most policies. Third, any other dues — pending reimbursements, bonus, incentive payouts, or a pro-rata bonus for the year. Fourth, a deduction if the employee has served less notice than their contract requires: the employer can recover pay for the shortfall days at the same daily gross rate, unless waived. Statutory dues like gratuity and any pending Provident Fund transfer are handled separately from FnF and aren’t included in this estimate. Under the Payment of Wages Act and most state Shops & Establishments rules, FnF is expected to be settled within a defined window (commonly 30–45 days, and some states now mandate it within 2 working days) of the last working day — always check your state’s rule and your company’s HR policy for the exact timeline and formula, since some employers calculate leave encashment on gross rather than Basic+DA, and some waive the notice shortfall recovery entirely.

FnF settlement questions, answered

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