How to mail to HR for full and final settlement?

हिंदी में पढ़ें
June 19, 2019
By Advocate Chikirsha Mohanty

What is Full and Final Settlement in payroll?

When an employee is leaving the company, he has to get paid for last working month. This procedure of paying or recovering during the resignation process is called Final Settlement.

Final settlement can be done on the last working payroll month or subsequent months. The employee can be settled first and then resigned or you can resign an employee and then do the final settlement at a later date.

Connect with an expert lawyer for your legal issue

What components are used to decide the final settlement sum?

  • Unpaid Salary (including annual benefits such as leave travel allowance) and arrears, which is calculated as the number of days for which salary is to be paid multiplied by the gross salary divided by 26 (paid days in a month)

  • Unpaid bonus

  • Payment for non-availed leaves, which is calculated as the number of days of non-availed leave multiplied by basic salary divided by 26

Apart from the usual components the following might be applicable:

  • Gratuity, if four years and 240 days have been completed

  • Pension

  • Deductions include profession tax (if applicable), provident fund, income tax and compensation for notice period not served.


What is the period of settlement?

As far as the period for settlement is concerned, the final settlement needs to happen on an employee's last working day at the organisation. However, as clearances take time, it is a prevalent policy to do so within 30-45 days after the employee has left.

For gratuity, the stipulation is 30 days after leaving the company, while bonuses must be paid within the specified accounting year.

Consult: Top Labour and Service Lawyers in India

What necessary measures that an employee must do to ensure no complications?

  • Make sure to settle any advances taken or get it adjusted in the final settlement.

  • Get a copy of all the various clearances required from the different departments of the organisation that you were attached with.

  • Refer to the standing orders of the company, employee rule book, HR policy handbook etc. All such policies should be kept within the reach and knowledge of the employee. If these policies are not available with you may demand these and also try and obtain from some colleague.

  • Instead of making verbal communications you should address written representation under acknowledgment to your HR contact and narrate all representations by phone (mention phone numbers, date, time etc.) and minutes of discussion, followed by escalation to MD, Chairman, Company Secretary, with a copy to Head-HR and raise your queries.



Under which law can an employee seek relief?

An employee can seek relief under Industrial Employment Standing Orders Act, SE Act applicable to the state, Payment of Wages Act, ID Act as per explanation of employee under these enactments or through Civil Court.

Consult best labour service lawyers near you.

Connect with an expert lawyer for your legal issue

What is the general format of a Full and Final settlement letter?

The GM- HR,
......................(Name of Company)

Re: Issuance of Full & Final Settlement

Dear Sir / Madam,

This is for your kind information that the undersigned has resigned from your organization and is requesting you to kindly process the full and final settlement from your end. 

The details are as below: 

Name : 
Employee Code : 
Designation : 
Project : 
Date of resignation : 

Thanking you 
Kind Regards
..........(Current Address)



These guides are not legal advice, nor a substitute for a lawyer
These articles are provided freely as general guides. While we do our best to make sure these guides are helpful, we do not give any guarantee that they are accurate or appropriate to your situation, or take any responsibility for any loss their use might cause you. Do not rely on information provided here without seeking experienced legal advice first. If in doubt, please always consult a lawyer.

Googling your legal issue online?

The internet is not a lawyer and neither are you.
Talk to a real lawyer about your legal issue.

Popular Labour & Service Lawyers

Advocate Sunil Kumar Bakshi
Sector-16 , Faridabad
33 years Experience
Advocate Wg Cdr Ajit Kakkar (Retd)
Dwarka , Delhi
20 years Experience
Advocate J. P. Rinwa
Swej Farm, Sodala , Jaipur
19 years Experience
Advocate Bala Janaki
330 Thambuchetty Street , Chennai
35 years Experience

Related Articles

Connect with top Labour & Service lawyers for your specific issue

Labour & Service Law Articles

Rights of Employees in India

The Industrial Dispute Act, 1947

Are you working overtime? Know these Laws!

Laws on sexual harassment at workplace in India

User Reviews

4.9 - 18 reviews

needed more information. Where to call?

Pratibha on Feb 29, 2020

very well written

Sanjeev on Feb 24, 2020

thank you for the article

Rajkumar on Feb 13, 2020

Detailed and informative.

Abhishek on Mar 05, 2020

great content. Thanks.

Vaishali on Feb 13, 2020

I have a case. Who can I contact?

Radhika on Feb 27, 2020

Very informative and a good read as well.

Swapna on Mar 13, 2020

Gave a clear understanding about my legal issue.

Ranjan on Feb 23, 2020

thanks for the advice

Veena on Feb 24, 2020

how to contact a lawyer for my legal case?

Shreya on Feb 18, 2020

very nice article

Bhavesh on Mar 21, 2020

Helped a lot in understanding the law.

Shailendra on Feb 17, 2020

nice article. Thanks for the information

Pinky on Mar 24, 2020

needed some more information on the subject.

Anurag on Feb 20, 2020

good work

Pinky on Feb 10, 2020

nice work. Learned a lot. Thanks

Raghavendra on Mar 21, 2020

Very nice article. English is very simple. Thank you for the information.

Mohan on Feb 22, 2020

learned all the basics about the legal issue. Good article. Keep it up.

Kishor on Mar 06, 2020