Pillar GuideUpdated June 2026 · Labour Codes

Full and Final Settlement Letter:
Format, Sample, Calculation & Free Generator

A full and final settlement letter is the document that confirms exactly what an employee is owed — and paid — when they leave a company: pending salary, leave encashment, gratuity, bonus, and reimbursements, net of any deductions. This guide covers the format, a complete sample, an editable template, how the calculation works, and what India's Code on Wages, 2019 and Code on Social Security, 2020 require — for HR teams drafting one and employees checking what they're owed.

✓ Itemised earnings & deductions✓ Cites the 2026 Labour Codes✓ Editable template + filled sample✓ Word, PDF & email-ready output✓ Employer & employee perspectives

Last updated: June 2026Reviewed by: OfficeDraft Legal TeamTemplate version: v3.2

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Quick facts

FnF payment deadline2 working days

Gratuity threshold5 yrs (1 yr for FTEs)

Statutory bonus range8.33%–20%

Fixed central format?None — HR practice

Labour complaint cost₹0 (free)

Generator price₹49 only

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Settlement overdue past 2 working days? Section 17 of the Code on Wages, 2019 gives the employer no defence for delay beyond that window. Use the tool below, or go straight to the FnF Demand Letter Generator to escalate.

India · All States · Code on Wages, 2019

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Need to demand a delayed settlement instead of issuing one? Use the dedicated Full & Final Settlement Letter Generator or the FnF Demand Letter Generator.

What Is a Full and Final Settlement Letter?

A full and final settlement letter — often shortened to FnF settlement letter — is the document an employer sends a departing employee to confirm exactly what they are owed and what has been (or will be) paid: pending salary, leave encashment, gratuity, bonus or incentive, and reimbursements, minus any deductions such as notice pay recovery, outstanding loans, or tax deducted at source. It is the closing financial record of the employment relationship.

The term covers three related but distinct documents, which is why search intent around "full and final settlement letter" spans both HR teams drafting one and employees who haven't received theirs. The table below separates them clearly.

Document	Issued By	Purpose	When Used
Full & Final Settlement Letter	Employer	Confirms the calculation and payment of every due owed at exit.	Issued at, or within 2 working days of, the last working day.
FnF Demand Letter	Employee	Formally demands release of dues that are overdue or unpaid.	Sent once settlement is delayed beyond a reasonable period.
Relieving Letter / Experience Certificate	Employer	Confirms tenure, designation, and conduct — not money owed.	Issued at exit, alongside but legally separate from FnF.

If your employer is withholding dues, your relieving letter, or both, see FnF Demand Letter Without Relieving Letter for that specific scenario.

Why a Full and Final Settlement Letter Is Important

The letter matters for different reasons on each side of the table — both of which make it worth getting right.

For the employer

→Closes a clear compliance record for Code on Wages and Code on Social Security audits.
→Reduces the chance of a labour complaint or Section 17 claim months after exit.
→Gives payroll and finance a single reconciled document instead of scattered emails.
→Protects the company if the employee disputes the amount later — the signed letter is your evidence.

For the employee

→Serves as proof of clean financial closure for a new employer's background verification.
→Often required as income or exit proof for loan, visa, or rental applications.
→Documents your gratuity and leave-encashment calculation in case of a later EPFO or tax query.
→Is your strongest evidence if you need to escalate a delayed payment to the Labour Department.

When Should Employers Issue a Full and Final Settlement Letter?

Every type of separation triggers the same underlying obligation — only the surrounding paperwork differs.

Resignation

After the notice period (or earlier, by mutual agreement) — clearance should start the day resignation is accepted, not after the last working day.

Termination

Whether for cause or otherwise, FnF timing obligations apply regardless of the reason for separation.

Retirement / Superannuation

Settlement runs alongside retirement formalities, gratuity, and pension fund closure.

End of fixed-term contract

Settlement is due on the contract's natural expiry, including pro-rata gratuity for eligible fixed-term employees.

Retrenchment / Layoff

Settlement runs alongside retrenchment compensation and any re-skilling fund contribution obligations.

Mutual separation

Settlement terms agreed in a separation agreement should still be reflected in a formal FnF letter.

The practical timing rule

Begin exit clearance — asset return, manager sign-off, finance reconciliation — the day resignation or termination is communicated, not after the last working day. Waiting until the last working day to start the process makes the 2-working-day legal deadline almost impossible to meet.

Legal Position in India: The 2026 Labour Codes

Full and final settlement is not, itself, separately legislated — there is no single "Full and Final Settlement Act." What is legislated is the underlying obligation to pay specific dues within specific timelines, and those rules changed materially on 21 November 2025, when the Code on Wages, 2019, the Code on Social Security, 2020, the Industrial Relations Code, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 came into force nationwide, consolidating 29 older labour laws.

Old Law (pre–Nov 2025)	Now Governed By	What Changed for FnF
Payment of Wages Act, 1936	Code on Wages, 2019	FnF wages now due within 2 working days of exit (Section 17(2)), replacing the older 7–10 day wage-cycle timeline.
Payment of Gratuity Act, 1972	Code on Social Security, 2020	5-year continuous-service rule continues for most employees; fixed-term employees now get pro-rata gratuity after just 1 year.
Payment of Bonus Act, 1965	Code on Wages, 2019 (Ch. IV)	8.33%–20% bonus framework is carried over; forfeiture still limited to fraud, violent conduct, theft, sabotage, or a sexual-harassment conviction.
Industrial Disputes Act, 1947	Industrial Relations Code, 2020	Recovery of unpaid dues and dispute resolution now routes through Grievance Redressal Committees and Industrial Tribunals under the IR Code.

Central Rules vs. State Rules — the nuance most guides skip

The Central Government notified the Code on Wages (Central) Rules, 2026 and equivalent Central Rules under the other three Codes on 8 May 2026. These Central Rules apply only to establishments where the Central Government is the "appropriate Government" — railways, mines, major ports, banking, insurance, and Central PSUs. Most private employers — IT, BPO, startups, retail, manufacturing — fall under Statejurisdiction and remain governed by their State Shops & Establishments Act until their own State notifies Rules under the Codes. The Codes' core entitlements (like the 2-working-day FnF rule) are already in force everywhere, but procedural detail can still vary by state during this transition.

In practical terms: the 2-working-day deadline for FnF wages under Section 17 of the Code on Wages, 2019 is binding nationwide today. Gratuity, under the Code on Social Security, 2020, continues to require 5 years of continuous service for most employees, with a new 1-year pro-rata entitlement for fixed-term employees. Statutory bonus, now governed by Chapter IV of the Code on Wages, 2019, keeps the familiar 8.33%–20% range. Recovery of unpaid dues, previously routed through the Industrial Disputes Act, 1947, now runs through the dispute-resolution machinery of the Industrial Relations Code, 2020 — including mandatory Grievance Redressal Committees in establishments with 20 or more workers.

What Should Be Included in a Full and Final Settlement Letter

Twelve elements separate a settlement letter that holds up under scrutiny from one that invites a dispute.

Company letterhead and the date of issue

Employee name, ID, designation, and department

Date of joining and confirmed last working day

Reason for separation (resignation, termination, retirement, contract expiry)

Itemised earnings — salary, leave encashment, gratuity, bonus, reimbursements

Itemised deductions — notice pay recovery, loans, TDS, unreturned assets

Net payable amount, shown in both figures and words

Mode and confirmed date of payment (NEFT / cheque / value date)

Status of PF (UAN), ESI, and gratuity nomination, where applicable

A no-dues / clearance confirmation line

Authorised signatory name, designation, and company seal

A named contact point for queries or disputes about the calculation

Full and Final Settlement Calculation Explained

Net payable is simply total earnings minus total deductions — but each line has its own formula and legal basis. This is what the generator above calculates automatically.

Component	Formula	Legal Basis / Note
Pending Salary	(Monthly Gross ÷ Days in month) × Days worked since last payroll	Code on Wages, 2019, §17 — payable within 2 working days of exit
Leave Encashment	(Basic + DA ÷ 26) × Unused earned/privileged leave days	Governed by the applicable State Shops & Establishments Act; leave-cap rules vary by state
Gratuity	(Last drawn Basic + DA × 15 × Completed years of service) ÷ 26	Code on Social Security, 2020 — 5-yr rule (1-yr pro-rata for fixed-term); tax-free up to ₹20 lakh
Statutory Bonus	8.33%–20% of eligible wages for the accounting year	Code on Wages, 2019, §26–39 — min. 30 days worked, wages within the notified ceiling
Notice Pay Recovery	(Gross monthly salary ÷ 30) × Notice days short-served	Contractual deduction, not a statutory due — must be itemised separately
Reimbursements	Sum of approved, unpaid expense claims	Contractual — pull from the expense system, not estimated
Statutory Deductions	TDS + PF dues + loan/advance recovery + unreturned-asset cost	Income Tax Act, 1961 / EPF & MP Act, 1952 / company asset policy

Net Payable = Total Earnings (A) − Total Deductions (B). Need a clean payslip to verify your last drawn wages first? Use the Salary Slip Generator.

Editable Full and Final Settlement Letter Template

Copy this bracketed template directly into Word, or use the generator above to have every field filled and calculated automatically.

[Company Name] [Company Address] Date: [DD/MM/YYYY] To, [Employee Name] [Employee Address] Subject: Full and Final Settlement — [Employee Name] (Employee ID: [ID]) Dear [Employee Name], This letter confirms the Full and Final Settlement of your dues following your [resignation / termination / retirement] from [Company Name], with your last working day recorded as [Last Working Day]. A. EARNINGS 1. Pending Salary ([Period]) ₹[Amount] 2. Leave Encashment ([X] days) ₹[Amount] 3. Gratuity ₹[Amount] 4. Bonus / Incentive ₹[Amount] 5. Reimbursements ₹[Amount] Total Earnings (A) ₹[Amount] B. DEDUCTIONS 1. Notice Pay Recovery ([X] days) ₹[Amount] 2. Loan / Advance Recovery ₹[Amount] 3. Tax Deducted at Source (TDS) ₹[Amount] 4. Other Deductions ([Specify]) ₹[Amount] Total Deductions (B) ₹[Amount] NET AMOUNT PAYABLE (A − B): ₹[Amount] ([Amount in Words]) This amount will be credited to your registered bank account via [NEFT / Cheque] on or before [Payment Date]. Your Provident Fund account (UAN: [UAN Number]) remains active for transfer or withdrawal as per the EPFO process. Please sign and return the duplicate copy of this letter to acknowledge receipt and confirm that you have no further claims against [Company Name] arising from your employment. For any queries regarding this settlement, please contact [HR Contact Name] at [HR Email / Phone]. Yours sincerely, [Authorised Signatory Name] [Designation] [Company Name] [Company Seal / Stamp]

Complete Sample Full and Final Settlement Letter

A fully filled, illustrative example showing how the template above looks once every figure is in place.

Nimbus Tech Solutions Pvt. Ltd. 4th Floor, Cyber Towers, Hyderabad, Telangana – 500081 Date: 18/06/2026 To, Ananya Sharma Flat 302, Lakeview Residency, Gachibowli, Hyderabad – 500032 Subject: Full and Final Settlement — Ananya Sharma (Employee ID: NT-2291) Dear Ananya, This letter confirms the Full and Final Settlement of your dues following your resignation from Nimbus Tech Solutions Pvt. Ltd., with your last working day recorded as 31 May 2026. A. EARNINGS 1. Pending Salary (1–31 May 2026) ₹78,500 2. Leave Encashment (9 days) ₹24,200 3. Gratuity (5 years 4 months of service) ₹1,05,800 4. Performance Bonus (FY 2025–26) ₹42,000 5. Reimbursements (approved travel claims) ₹6,300 Total Earnings (A) ₹2,56,800 B. DEDUCTIONS 1. Notice Pay Recovery (7 days short-served) ₹18,308 2. Laptop Insurance Recovery (device not returned) ₹0 3. Tax Deducted at Source (TDS) ₹21,450 4. Other Deductions ₹0 Total Deductions (B) ₹39,758 NET AMOUNT PAYABLE (A − B): ₹2,17,042 (Rupees Two Lakh Seventeen Thousand and Forty-Two Only) This amount will be credited to your registered bank account via NEFT on or before 02 June 2026. Your Provident Fund account (UAN: 100847562931) remains active for transfer or withdrawal as per the EPFO process. Please sign and return the duplicate copy of this letter to acknowledge receipt and confirm that you have no further claims against Nimbus Tech Solutions Pvt. Ltd. arising from your employment. For any queries regarding this settlement, please contact Priya Nair, HR Manager, at [email protected] or +91-90000-00000. Yours sincerely, Priya Nair HR Manager Nimbus Tech Solutions Pvt. Ltd. [Company Seal]

Names, company, and figures above are illustrative only. Use the generator above to produce your own version with real figures, calculated automatically.

Word, PDF & Email Versions

The generator above produces all three formats from one filled form — no need to redo the calculation for each.

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A locked, shareable version ready to attach to an email or upload to an HRMS or employee self-service portal.

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Email-ready version

Plain-text formatting that pastes cleanly into an email body, with the itemised table preserved.

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Common HR Mistakes in Full and Final Settlement

These mistakes are the most frequent cause of disputes, delays, and labour complaints — avoid them in your own process.

A single flat figure, no itemisation

A lump-sum number invites disputes. Every earning and deduction should appear as its own line with a formula or basis, not just a final total.

Missing statutory basis for deductions

A "miscellaneous deduction" line with no explanation is exactly what a Labour Commissioner or Grievance Redressal Committee will challenge first.

No confirmed payment date

Stating an amount without a value date leaves the 2-working-day requirement under Section 17 effectively unmet on paper.

Holding the entire amount over one disputed line item

If only the notice-pay calculation is contested, release the undisputed salary, leave, and gratuity components while that one item is resolved.

Treating it as interchangeable with the relieving letter

Conflating the two documents creates confusion about what has actually been confirmed — tenure and conduct are not the same as money owed.

No signed acknowledgment on file

Without a signed or emailed acknowledgment, the company has no proof the letter was received or that the employee accepted the calculation.

Missing the 2-working-day timeline

Defaulting to "next payroll cycle" by habit, when Section 17 of the Code on Wages, 2019 now requires payment within 2 working days of exit.

Ignoring the State-Rules transition period

For employers under State jurisdiction, failing to track whether the relevant State has notified its own Rules under the Codes yet can mean applying the wrong timeline.

Employee Rights in Full and Final Settlement

These rights apply regardless of company size, sector, or whether you resigned or were terminated.

Timely payment

FnF wages payable within 2 working days of resignation, termination, or retrenchment (Code on Wages, 2019, §17).

An itemised statement

A clear breakdown of every earning and deduction, not just a final number.

Gratuity, if eligible

5 years of continuous service for most employees; 1 year pro-rata for fixed-term employees.

Leave encashment

Payment for unused earned/privileged leave as per company policy and the applicable State Act.

A wage slip

Issued on or before payment, under Section 21 of the Code on Wages, 2019.

A relieving letter and experience certificate

Separate from FnF dues, but commonly withheld together — see the linked guide if this happens to you.

Access to dispute redressal

A free complaint to the Labour Commissioner, or a Grievance Redressal Committee where the employer has 20+ workers.

Protection against unfair bonus forfeiture

A statutory bonus can be denied only for fraud, violent conduct, theft, sabotage, or a sexual-harassment conviction.

Dues delayed past the legal window? Generate a unpaid salary demand letter, unpaid gratuity demand letter, or unpaid bonus demand letter depending on what's missing.

Employer Responsibilities

Compliance obligations that sit behind every settlement letter, beyond just getting the math right.

Issue settlement within the legal timeline

Pay FnF wages within 2 working days of the employee's exit under Section 17, Code on Wages, 2019.

Maintain wage and attendance registers

Preserve records for at least 5 years, as required under the Code on Wages, 2019.

Issue wage slips

Provide a wage slip in the prescribed form on or before payment of wages (Section 21).

Set up a Grievance Redressal Committee

Mandatory where the establishment employs 20 or more workers, under the Industrial Relations Code Rules.

Deposit unclaimed dues

Undisbursed amounts must be deposited with the jurisdictional labour authority after a defined unclaimed period.

Avoid unlawful deductions

Deductions must be limited to those permitted under Section 18 of the Code on Wages, 2019 and the employment contract.

Track Central vs. State applicability

Confirm whether the establishment sits under Central or State "appropriate Government" jurisdiction before applying Central Rules timelines.

Keep a documented audit trail

Retain the signed settlement letter, calculation sheet, and proof of payment together for every separation.

Best Practices for Full and Final Settlement

These go beyond the legal minimum and are what separates a smooth exit process from a chaotic one.

✓Standardise one FnF calculation sheet template used by payroll for every separation, regardless of exit type.
✓Start exit clearance the day resignation is accepted, not after the last working day, to actually meet the 2-working-day window.
✓Share the calculation breakdown with the employee before finalising, so disputes surface early rather than after payment.
✓Automate leave-balance, loan-ledger, and reimbursement pulls from existing systems rather than relying on manual emails.
✓Get a signed or emailed acknowledgment of the settlement letter and store it with the payment proof.
✓Release undisputed components immediately even if one line item (e.g. notice pay) is still being reconciled.
✓Align the relieving letter date with the last working day recorded in the settlement letter to avoid contradictory documents.
✓Review your FnF SOP annually against newly notified Central or State Rules under the Labour Codes.
✓Keep digital records for at least 5 years, matching the retention period required under the Code on Wages, 2019.
✓Use a consistent, professional letter format — see the template below — instead of an ad hoc email for every exit.

Frequently Asked Questions — Full and Final Settlement Letter

What is a full and final settlement letter?▾

A full and final settlement letter is a written communication, usually from an employer to a departing employee, that itemises every due owed at exit — pending salary, leave encashment, gratuity, bonus, and reimbursements — minus deductions such as notice pay recovery, loans, and TDS, and states the resulting net payable amount.

Is there a legally mandated format for a full and final settlement letter in India?▾

No single central law prescribes a fixed format. What is legally mandated is the underlying obligation — timely payment under Section 17 of the Code on Wages, 2019, and a wage slip in the prescribed form. The settlement letter itself is an HR documentation best practice that fulfils these obligations clearly and auditably.

How long does an employer have to complete full and final settlement?▾

Under Section 17(2) of the Code on Wages, 2019, wages payable on removal, dismissal, retrenchment, or resignation must be paid within two working days. Gratuity, where applicable, is separately payable within 30 days under the Code on Social Security, 2020. Employers under State jurisdiction whose State Rules are not yet notified may still follow a 30–45 day practical window during this transition, though that is no longer the strict legal standard.

What is included in full and final settlement?▾

Pending salary up to the last working day, encashment of unused earned leave, gratuity if eligible, any earned and approved bonus or incentive, and pending reimbursements — less deductions such as notice pay recovery, outstanding loans or advances, TDS, and the cost of unreturned company assets.

Is gratuity part of full and final settlement?▾

Yes, where the employee qualifies. Under the Code on Social Security, 2020, gratuity is generally payable after 5 years of continuous service, calculated as 15 days' wages for every completed year of service. Fixed-term employees now qualify for pro-rata gratuity after just 1 year, and the 5-year requirement is waived for death or disablement.

Can an employer deduct notice pay from full and final settlement?▾

Yes — if the employee leaves before completing the contractual notice period, the employer can typically recover a proportionate amount as notice pay, calculated on the gross monthly salary. This must appear as a separate, itemised deduction rather than an unexplained reduction in the final figure.

What if my employer delays or refuses full and final settlement?▾

Send a written demand letter citing Section 17 of the Code on Wages, 2019 with a clear response deadline. If there is no response, file a free complaint with the Labour Commissioner, or with the Grievance Redressal Committee where the employer has 20 or more workers, before escalating further under the Industrial Relations Code, 2020.

Is a full and final settlement letter the same as a relieving letter?▾

No. A relieving letter confirms an employee has been released from their role and completed exit formalities. A full and final settlement letter confirms the calculation and payment of money owed. They are usually issued around the same time but are legally separate documents.

Is the full and final settlement amount taxable?▾

It depends on the component. Pending salary, bonus, and leave encashment (beyond specified exemptions) are generally taxable as salary income. Gratuity is tax-exempt up to ₹20 lakh for private-sector employees under Section 10(10) of the Income Tax Act, 1961. Reimbursements against actual bills are typically not taxable.

Official Government Resources

↗Ministry of Labour & Employment — India ↗Code on Wages, 2019 — IndiaCode ↗Payment of Gratuity Act, 1972 — IndiaCode ↗Industrial Disputes Act, 1947 — IndiaCode ↗Code on Wages, 2019 — Ministry Overview ↗Shram Suvidha Portal — Online Labour Complaint ↗eSHRAM — Unorganised Worker Registration

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Full & Final Settlement Letter Generator

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FnF Demand Letter Generator (General)

The core generator for resignation and termination scenarios.

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FnF Demand Letter After Resignation

Resigned and waiting on your full settlement? Use this resignation-specific version.

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FnF Demand Letter After Termination

Terminated and FnF pending? This version cites the termination-specific timeline.

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FnF Demand Letter — Salary Not Paid

Targeted specifically at recovering unpaid salary as part of FnF.

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FnF Demand Letter — Gratuity Not Paid

A focused letter for recovering unpaid gratuity under the Code on Social Security.

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FnF Demand Letter — Bonus Not Paid

For statutory, performance, or incentive bonus missing from your FnF.

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FnF Demand Letter Without Relieving Letter

For when both your relieving letter and FnF dues are being withheld.

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FnF Demand Letter — IT Company

Built specifically for IT and ITES sector exits.

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FnF Demand Letter — Startup

For employees exiting early-stage or funded startups.

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FnF Demand Letter — MNC Employee

Tailored for multinational corporate structures and HR shared-services teams.

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FnF Demand Letter — TCS / Infosys / Wipro

For exits from large Indian IT services majors.

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FnF Demand Letter — Bangalore

Karnataka Shops & Establishments Act-specific guidance for Bangalore employees.

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FnF Demand Letter — Delhi

Delhi-specific guidance and labour department escalation details.

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FnF Demand Letter — Hyderabad

Telangana-specific guidance for Hyderabad IT, BPO, pharma & startup employees.

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FnF Demand Letter — Pune

Maharashtra-specific guidance for Pune employees.

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FnF Demand Letter — Karnataka

State-level guidance for the whole of Karnataka.

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FnF Demand Letter — Telangana

State-level guidance for the whole of Telangana.

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FnF Demand Letter — Tamil Nadu

State-level guidance for the whole of Tamil Nadu.

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FnF Demand Letter — Gujarat

State-level guidance for the whole of Gujarat.

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FnF Demand Letter — Haryana

State-level guidance for the whole of Haryana, including Gurugram.

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FnF Demand Letter — Uttar Pradesh

State-level guidance for the whole of Uttar Pradesh.

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FnF Demand Letter — West Bengal

State-level guidance for the whole of West Bengal.

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FnF Labour Commissioner Complaint Letter

The formal complaint letter to escalate to the Labour Department.

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FnF Legal Notice Generator

A formal legal notice if a demand letter alone has been ignored.

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Salary Slip Generator India

Generate supporting payslips to verify last-drawn wages for your calculation.

Editorial Review

This guide was drafted and reviewed by the OfficeDraft Legal Team, a group focused on Indian labour law, HR documentation, and employee dispute resolution. It is updated whenever Central or State Rules under the Labour Codes are notified or amended.

Sources

Code on Wages, 2019, and the Code on Wages (Central) Rules, 2026 — Ministry of Labour & Employment, Government of India
Code on Social Security, 2020 — Ministry of Labour & Employment, Government of India
Industrial Relations Code, 2020 — Ministry of Labour & Employment, Government of India
Payment of Gratuity Act, 1972 and Industrial Disputes Act, 1947 (as consolidated) — via IndiaCode
Income Tax Act, 1961, Section 10(10) — gratuity exemption limit
Official Gazette notifications dated 21 November 2025, 30 December 2025, and 8 May 2026

Methodology

This page was researched directly against primary government sources — Gazette notifications and Ministry of Labour & Employment circulars — rather than relying solely on secondary commentary, and cross-checked against multiple independent legal and compliance publications for consistency. Calculation formulas were verified against the current statutory framework (Code on Wages, 2019 and Code on Social Security, 2020) and standard payroll practice. The template and sample were reviewed for completeness against the "what should be included" checklist before publication. Because Central and State Rules under the Labour Codes are still being notified state-by-state, this page is scheduled for review every quarter, or immediately upon any new Central or State Rules notification.

Last Updated: June 2026Reviewed By: OfficeDraft Legal TeamTemplate Version: v3.2Next Scheduled Review: September 2026

Legal Disclaimer

This page is provided for educational and informational purposes only and does not constitute legal advice. The content summarises Indian labour law applicable as at June 2026, including the Code on Wages, 2019, the Code on Social Security, 2020, the Industrial Relations Code, 2020, the Occupational Safety, Health and Working Conditions Code, 2020, and provisions of the Payment of Gratuity Act, 1972 and Industrial Disputes Act, 1947 as consolidated into the Codes. Central Rules apply only to Central-sphere establishments; State Rules may still be pending notification in your state, in which case prior State-level practice continues under the Codes' savings clause. This page may not reflect subsequent legislative, regulatory, or judicial changes.

Reviewed by the OfficeDraft Legal Team — last updated June 2026. OfficeDraft is not a law firm and does not provide regulated legal services. For disputes involving large or contested claims, consult a qualified employment lawyer or the Ministry of Labour & Employment, India.

Code on Wages, 2019 · Code on Social Security, 2020 · All 36 States & UTs

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Covers: Salary · Leave encashment · Gratuity · Bonus · Reimbursements · Deductions — fully itemised

Last Updated: June 2026 · Next scheduled review: September 2026

Full and Final Settlement Letter:Format, Sample, Calculation & Free Generator