Full n Final Settlement Services

Automated Full-n-Final (FnF) Settlement

Full and Final Settlement (FnF), is the process through which an employer calculates and disburses all dues owed to an employee who is leaving the organization. This can occur due to resignation, retirement, or termination. The FnF process ensures that all financial obligations between the employer and the employee are settled before the employee exits.

Key Components of Full and Final Settlement

Outstanding Salary

This includes any unpaid salary up to the employee's last working day. According to labor laws, this amount must be calculated and paid promptly after the employee's departure.

Leave Encashment

Employees may be entitled to encash any unused earned leaves. The calculation for this is typically based on the employee's basic salary and the number of unutilized leave days.

Gratuity

Employees who have served for a minimum period (usually 4 years and 10 months) are eligible for gratuity payments. This must be settled within a specified time frame after the employee leaves

Bonuses and Incentives

Any bonuses that have been declared but not yet paid must be included in the final settlement amount

Provident Fund (PF)

Contributions made to the Provident Fund during employment are also settled during this process. Employees can either transfer their PF to a new employer or withdraw it

Deductions

The final settlement will also account for any deductions such as taxes, loans, or penalties owed by the employee

Process of Full and Final Settlement

Clearances

Before processing the settlement, clearances from various departments (like IT, HR, and finance) are required to ensure all company property has been returned and obligations met.

Calculation

The payroll department calculates all components mentioned above to arrive at the total amount payable to the employee.

Payment

Once calculated, the payment is processed, usually within a specific timeframe after the employee's last working day.

Documentation

A formal FnF settlement letter is issued to document the transaction, detailing all components of the payment and any deductions made

At SGCMS, we understand the challenges faced by small and medium enterprises when it comes to managing the Full n Final Settlement process for their employees. Our dedicated services are designed to alleviate the complexities associated with exit procedures, ensuring a hassle-free experience for both employers and departing staff members.

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