Work out what is actually owed to you when you leave a job in India. This full and final settlement calculator applies the statutory formulas — gratuity under the Payment of Gratuity Act 1972, retrenchment compensation under Section 25F of the Industrial Disputes Act 1947, statutory bonus under the Payment of Bonus Act 1965 — to the figures you enter, and produces a line-by-line statement of dues you can copy and annexe to a legal notice. Every statutory constant used is printed on this page so you can check it.
A full and final settlement is the closing account between an employer and a departing employee. It is not a single statutory entitlement but a bundle of heads, each with its own source. Salary for days worked and pending reimbursements are contractual. Leave encashment comes from the state Shops and Establishments Act, the Factories Act 1948, or the contract, whichever is more favourable. Gratuity comes from the Payment of Gratuity Act 1972. Statutory bonus comes from the Payment of Bonus Act 1965. Retrenchment compensation, where the exit is a retrenchment, comes from Section 25F of the Industrial Disputes Act 1947. Notice pay is contractual, subject to the statutory minimum notice that applies to a workman.
Disputes about F&F are rarely disputes about arithmetic. They are disputes about which heads are payable at all — whether the qualifying service for gratuity was met, whether the exit was a resignation or a constructive dismissal, whether a recovery the employer has deducted was one it was entitled to make. Getting the arithmetic on paper first is what makes the real disagreement visible.
Section 4(2) of the Payment of Gratuity Act 1972 entitles a monthly-rated employee to fifteen days' wages for every completed year of service. Because a monthly-rated employee is treated as working twenty-six days a month, the fifteen days is expressed as 15/26 of the last drawn monthly wages, multiplied by the years of service. Wages here mean basic plus dearness allowance under Section 2(s) — not gross, and not CTC. A part year beyond six months counts as a full year. The qualifying period is five years of continuous service under Section 4(1), waived where the exit is on death or disablement. The ceiling is ₹20,00,000.
Section 7(3) requires payment within thirty days of gratuity becoming payable. Where the employer misses that window, Section 7(3A) provides for simple interest on the delayed amount at the rate notified by the Central Government. Forfeiture is available only on the narrow grounds in Section 4(6) — damage or loss caused by the employee, riotous conduct, or an offence involving moral turpitude committed in the course of employment — and only after notice and an opportunity to be heard. A blanket refusal to release gratuity pending “clearance” is not one of those grounds.
Where the exit is a retrenchment and the employee is a workman within Section 2(s) of the Industrial Disputes Act 1947 with one year of continuous service as defined in Section 25B, Section 25F makes three things conditions precedent to a valid retrenchment: one month's notice in writing stating the reasons, or wages in lieu; compensation equivalent to fifteen days' average pay for every completed year of continuous service or part of it beyond six months; and notice to the appropriate government. A retrenchment carried out without them is not merely underpaid — it is open to challenge as invalid.
The Payment of Bonus Act 1965 uses two ceilings that are frequently confused. The eligibility ceiling in Section 2(13) determines who is covered: an employee drawing salary or wages above it is outside the Act altogether. The calculation ceiling in Section 12 determines the figure on which bonus is worked out: where actual wages exceed it, bonus is computed as if the wages were the ceiling. The minimum bonus under Section 10 is 8.33 per cent, the maximum under Section 11 is 20 per cent, and the employee must have worked at least thirty days in the accounting year. Bonus for the year in which an employee leaves is payable pro rata for the months worked, within eight months of the close of the accounting year under Section 19.
The Code on Wages 2019, the Industrial Relations Code 2020, the Code on Social Security 2020 and the Occupational Safety, Health and Working Conditions Code 2020 subsume most of the statutes named above, and they shorten the settlement timeline considerably — the Code on Wages requires wages on removal, dismissal, retrenchment or resignation to be paid within two working days. Their commencement has been staged rather than uniform, and the applicable rules differ by state. Which regime governs a particular exit therefore depends on the commencement position on the date of that exit. The figures on this page are computed on the pre-code statutes; where the codes are in force for your establishment, the timelines and some definitions change.
There is no single answer, because the heads have different sources. Gratuity carries a thirty-day limit under Section 7(3) of the Payment of Gratuity Act 1972, with interest thereafter. Wages carry a two-working-day limit under Section 5(2) of the Payment of Wages Act 1936 for employees within that Act's wage ceiling. Most employment contracts specify their own F&F period, commonly thirty to forty-five days. A delay well past the contractual period, with no reason offered, is the point at which a written demand becomes worth sending.
It can adjust quantified, admitted recoveries — a salary advance, an unreturned laptop, a notice shortfall the contract permits it to recover. It cannot withhold the whole settlement indefinitely as leverage, and it cannot make the release of gratuity conditional on signing a general release. If a clearance formality is genuinely outstanding, the answer is to complete it in writing and put the employer to terms on the balance.
On the plain text of Section 4(1), no — the qualifying period is five years of continuous service, and the rounding rule in Section 4(2) applies to the computation of years once eligibility is established, not to eligibility itself. Some High Courts have read the fifth year as complete where 240 days of the fifth year were worked. It is a live point rather than a settled one, and it turns on which High Court's view governs. Worth raising in a notice; not worth assuming.
Where the contract provides for pay in lieu of notice, an employer can ordinarily adjust the shortfall against dues. What it cannot do is treat the notice clause as a bar on leaving, or recover an amount larger than the clause provides. Where the clause is one-sided — a long notice period on the employee and none on the employer — its enforceability is arguable.
For gratuity, an application to the Controlling Authority under Section 7 of the Payment of Gratuity Act 1972. For a quantified sum due to a workman, an application under Section 33C(2) of the Industrial Disputes Act 1947, which is a recovery proceeding rather than an adjudication of entitlement. For unpaid wages, the authority under the Payment of Wages Act 1936 or a complaint to the Labour Commissioner. Employees outside the definition of workman — most managerial and supervisory roles above the wage threshold — are generally left with a civil suit for recovery, or a summary suit where the claim is on a written contract. Choosing the wrong forum costs months, so the choice is worth taking advice on before filing.