Can we hold the settlement if clearance is pending?

Be careful. Withholding pay can raise legal issues. Take advice before holding any part, and record why.

Who works out gratuity and provident fund?

Your payroll provider computes them. Confirm eligibility and amounts with a qualified adviser. This sheet only records the figures.

What if the employee refuses to sign?

Record the refusal with the date, send the statement by a traceable route, pay what is due and take advice on next steps.

Free template

Full and final settlement statement

A statement that sets out everything owed to a leaving employee and everything recovered from them, on one page. Fill in the blanks from the payroll figures. The computation is done by your payroll provider; this sheet records and presents it.

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An HR consultant and business owner reviewing employee records together

Employee and exit details

Field	Detail
Employee name and ID
Designation and department
Date of joining
Date of resignation or termination
Last working day
Notice period required (days)
Notice period served (days)
Reason for leaving

Earnings (amounts due to the employee)

Item	Basis or days	Amount (₹)
Salary for the last month worked
Leave encashment
Pending reimbursements
Bonus or incentive due
Gratuity (if eligible)
Notice pay due to the employee (if any)
Other earnings
Total earnings (A)

Recoveries (amounts due from the employee)

Item	Basis or days	Amount (₹)
Notice shortfall recovery
Loan or advance outstanding
Unreturned company property
Statutory deductions (provident fund, professional tax, tax at source)
Other recoveries
Total recoveries (B)

Net settlement

Item	Amount (₹)
Net payable to employee (A minus B)
Net recoverable from employee (if B is more than A)
Net amount in words
Date and mode of payment

Clearance sign-offs

Department	Items cleared	Name and signature	Date
Reporting manager	Handover note and work in progress
IT	Laptop, email, accounts and access
Admin	ID card, access card, keys, assets
Finance	Advances, loans, claims
HR	Exit interview, documents, records

Acknowledgement by employee

I have read this statement. I confirm that I have received / will receive the net amount shown above and that I have returned all company property.

Signature: ______________________ Date: ____________

Prepared by: ______________________ Checked by: ______________________ Approved by: ______________________

Note

The computation of every figure is done by your payroll provider. Confirm statutory components, such as gratuity, provident fund and tax, and the timing of payment, with a qualified adviser. Do not ask the employee to sign away rights without advice.

A starting point, not legal advice. Check the final wording against your contracts and the rules of your state, and have a qualified professional review it before you issue it.

Exit and offboarding process →Exit checklist and handover note →Gratuity calculator →

How to use this template

Start the statement as soon as the last working day is fixed, not after it has passed.
Collect the figures from payroll, leave records and finance, and get your payroll provider to compute them.
Get each clearance sign-off on the table and attach the exit checklist.
Have a second person check the arithmetic and the dates before it goes to the employee.
Share the statement with the employee and take their acknowledgement with the payment date.
File the signed copy with the exit records and update your headcount and payroll systems.

A filled example (illustrative)

This example is invented for illustration. Replace every value with your own.

Item	Illustrative entry
Notice required	30 days
Notice served	20 days, 10 days short
Earnings	Last month's salary, leave encashment, pending claim
Recoveries	Notice shortfall and an advance
Net	Earnings minus recoveries, paid on the agreed date

Common mistakes

Waiting until after the last day to start working out the figures.
Recovering amounts without a clear basis in the contract or policy.
Leaving out leave encashment or pending claims, which creates disputes.
Taking sign-offs by email only, so there is no record of what was cleared.
Making the employee sign a blank or incomplete statement.

Adapt it to your business

Factory or plant: add tool, uniform and locker clearance and any safety equipment returned.
Shop or retail: add cash, stock and till reconciliation sign-offs.
Clinic or hospital: add clearance for patient records, keys and controlled items.
Office or services firm: add client handover, data deletion and access removal sign-offs.

Questions about this template

The timing is set by law and your policy, and can vary by state and situation. Confirm it with a qualified adviser and write the date on the statement.

Full and final settlement statement

Employee and exit details

Earnings (amounts due to the employee)

Recoveries (amounts due from the employee)

Net settlement

Clearance sign-offs

Acknowledgement by employee

Note

How to use this template

A filled example (illustrative)

Common mistakes

Adapt it to your business

Questions about this template

Let’s make HR work better.

Let’s start with your business

Full and final settlement statement

Employee and exit details

Earnings (amounts due to the employee)

Recoveries (amounts due from the employee)

Net settlement

Clearance sign-offs

Acknowledgement by employee

Note

How to use this template

A filled example (illustrative)

Common mistakes

Adapt it to your business

Questions about this template

01When should the final settlement be paid?

02Can we hold the settlement if clearance is pending?

03Who works out gratuity and provident fund?

04What if the employee refuses to sign?

Let’s make HR work better.

Let’s start with your business