Full and final settlement
The last payment an employer makes when you leave: pending salary, leave encashment and other dues, minus any recoveries.
Full and final settlement is the last payment when you leave a job. It usually covers unpaid salary, leave encashment, any bonus, and gratuity if you qualify, minus recoveries like a notice period shortfall. Under the Code on Wages, 2019, wages due must be paid within two working days of leaving. Our lesson on losing a job covers what to check.
Questions people ask
What is included in a full and final settlement?
Typically your unpaid salary, encashment of unused leave if your employer's policy allows it, any bonus or reimbursements due, and gratuity if you qualify, minus recoveries such as a notice-period shortfall or company dues. Ask for the breakup in writing.
How soon must final wages be paid?
Under the Code on Wages, 2019, which took effect on 21 November 2025, wages due to an employee who resigns, is dismissed or retrenched, or loses work because the establishment closes must be paid within two working days.
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