Glossary
Full and final settlement (F&F)
The reconciliation of dues an employer owes a departing employee — unpaid salary, leave encashment, gratuity if eligible, notice pay or recovery, bonus — closed out at exit.
F&F settlement pulls together every pending payment and deduction owed at separation: pro-rata salary, leave encashment, gratuity where vested, notice-period adjustments, and reimbursement claims.
Each component follows its own calculation rule — leave encashment and gratuity are wages-deeming-sensitive, while notice pay and reimbursements are typically contractual. An accurate F&F depends on getting each underlying rule right first.
Why it matters now: F&F is where deemed-wages errors surface most visibly to a departing employee. It is the highest-scrutiny payroll event to get right under the new definition.