Full and Final Settlement (F&F)
Full and final settlement is the closing calculation when an employee leaves — everything still owed to them, less everything they owe, paid as one amount after the last working day.
Also known as: FNF, F&F settlement, final settlement, FNF meaning
The earnings side typically includes unpaid salary up to the last working day, encashment of unused paid leave, gratuity where five years of service have been completed, and any pending reimbursements or bonus. The deductions side includes notice-period recovery where notice was not fully served, outstanding advances or loans, and the value of unreturned company assets.
Tax is applied to the taxable portion of what remains. Gratuity carries its own exemption up to the statutory limit; leave encashment and unpaid salary are treated differently again, which is why an F&F rarely reduces to a single obvious number.
Most F&F disputes are not arithmetic disputes. They are disagreements about what was agreed: whether notice was waived, whether a laptop was returned, whether leave taken during notice counted towards it. Each of those is a fact someone remembers differently three weeks later, and each is cheap to record at the time.
The practical test of a good exit process is whether the settlement can be produced without anyone reconstructing history. If attendance, leave balance, assets and salary all sit on the same employee record, the F&F is a calculation. If they do not, it is an investigation.
Statutory note
Timelines for settling dues on exit are set by state shops and establishments rules and, for covered workers, by wage legislation. Check the rules applicable to your establishment rather than relying on a company norm.
Handled in SignHR
Onboarding & Offboarding
Joining to exit in one flow: offer letters, digital joining forms, e-signatures, welcome workflows, clearance checklists, and full-and-final settlement.
See onboarding & offboardingRelated terms
Gratuity
Gratuity is a lump sum an employer pays an employee who leaves after five or more completed years of continuous service, calculated as fifteen days' wages for every year served.
Notice Period
Notice period is the time an employee must continue working after resigning, or that an employer must give before terminating, as set by the employment contract.
LOP (Loss of Pay)
LOP is an unpaid absence — a day an employee did not work and had no paid leave balance to cover, so the corresponding salary is deducted from that month's pay.
Leave Encashment
Leave encashment is payment for unused paid leave — converting a remaining balance into money, either annually or when an employee leaves.