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All-in-one HR platform · v2.0
14-day free trial · No credit cardhello@HrMagix.com
All-in-one HR platform · v2.0
14-day free trial · No credit cardhello@HrMagix.com
F&F
The closing payment when employment ends. It draws on every other record at once: salary to the last working day from attendance, leave encashment from the leave ledger, notice pay or recovery from the resignation record, gratuity where the qualifying service is complete, less advances and unreturned assets.
Settlement starts when resignation is accepted, not on the last day. HR collects clearances from IT, finance and the manager, payroll works out salary for days worked, leave encashment, any notice pay recovery, pending reimbursements, and gratuity if the person is eligible, and the final TDS is recalculated on the full year to date.
Example with illustrative figures: an employee leaving on 20 June with 12 days of encashable leave and a ₹15,000 laptop recovery receives 20 days' salary plus 12 days' encashment, minus the recovery and the tax due. Gratuity, where payable, is a separate line with its own rules on timing.
The common failure is letting settlement drift for months while clearances sit with one department. The Code on Wages, in force since 21 November 2025, requires wages due on separation to be paid within two working days (s.17(2)), so check the current requirement in your state as well. Share a written settlement statement so the employee can see every line.
The closing payment when employment ends.
Salary to the last working day, leave encashment, notice pay or recovery, gratuity where due, less advances and unreturned assets.
From the attendance record.
Yes. It is taken from the leave ledger.
Notice pay or a recovery is drawn from the resignation record.
Where the qualifying service is complete, generally five years of continuous service.
Advances and unreturned assets.
It draws on every other record at once: attendance, leave, resignation, service and recoveries.
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