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All-in-one HR platform · v2.0
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All-in-one HR platform · v2.0
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An exit has a fixed end point: the day the full and final settlement is paid and the relieving letter issued. Everything before that is a set of clearances, each owned by someone different, each capable of holding up the settlement if it is forgotten.
This employee exit checklist runs the steps in order. The offboarding topic page explains the purpose of offboarding; this guide is the procedure, and the full and final settlement article covers the settlement figures in more depth.
01
Acknowledge the resignation in writing with the date received. Then fix the last working day by applying the notice period in the appointment letter or policy, and record any agreed change: notice served in full, shortened by agreement, or bought out by either side.
If notice is shortened, the policy decides whether the shortfall is recovered as notice pay or waived. Record the decision when it is made, not at settlement, because it is the line most often disputed later.
Watch for itLeave taken during the notice period is a policy decision. Some employers allow it, some adjust it against notice, some refuse it. State the rule in the policy so each exit is not negotiated separately.
02
Send the clearance list to every owner when the resignation is accepted, not in the last week. Each owner confirms either that nothing is due or the amount to recover, with a reason.
03
Conduct the exit interview during the notice period, not on the last afternoon. Ask a small set of consistent questions so answers can be compared across exits, and keep notes separate from the personnel file if you want honest answers.
Exit interviews are useful only when read together. One person's reasons are anecdote; the same reason given by several people in one team is a finding.
04
The settlement brings together everything owed in both directions. Calculate each component separately and show it on the statement, so the employee can check each line.
Gratuity is payable under the Payment of Gratuity Act 1972, s.4, to an employee with five years' continuous service (the Act allows exceptions, such as death or disablement). It is 15 days' wages per completed year, wages being last drawn basic plus DA divided by 26, subject to the statutory maximum. Leave encashment follows your policy and any applicable state law.
Watch for itPayment timelines for final dues are set by the Code on Wages, in force since 21 November 2025, which requires wages due on removal, dismissal, retrenchment or resignation to be paid within two working days (s.17(2)). Check any state rule that also applies to your establishment.
05
Mark the date of exit against the employee's UAN on the EPFO employer portal, so the person can transfer or withdraw their provident fund. Update ESI records where the employee was covered. Include the final month in your regular returns.
Issue the relieving letter and experience letter once clearances are complete, and a Form 16 for the year in the normal course after the financial year ends. Keep the settlement statement signed or acknowledged by the employee.
Every guide ends here rather than in a summary. If a line below is not true yet, that is the next thing to do.
Written acceptance of the resignation, the last working day, clearances from manager, IT, admin and finance, an exit interview, the full and final settlement, statutory record updates, and the relieving and experience letters.
Many employers issue it after clearance is complete, and the policy should say so. Withholding documents indefinitely invites disputes, so close clearances promptly.
Yes, where the employee is eligible under the Payment of Gratuity Act 1972. It is usually computed and paid with the settlement.
It is computed under Section 192 on the employee's total income for the year with your organisation, including the settlement, after any exemptions that apply to components such as gratuity and leave encashment.
The employer updates the date of exit against the UAN. The employee can then transfer the balance to a new employer or apply for withdrawal under the scheme rules.
The checklist above is generic by necessity. Bring your own structures, states and rota and we will tell you which lines are already true and which are not.
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