Pocket HRMS makes F&F Settlement simply straightforward!
Bonuses refer to the rewards provided by the company for any kind of reason pre-defined by the company such as good performance. The employee is eligible to receive any pending bonus even in the case of resignation. Indian Factories Act, 1948 states that all unpaid dues such as unpaid salaries and bonuses should be paid by the 7th and 10th of the following month.
Gratuity is the amount paid by the company and the end of employment to recognize an employee’s loyalty towards the organization. As per the Payment of Gratuity Act, 1972, the gratuity should be paid within 30 days from the last working day, in cases where the employee has been working for a minimum of 4 years or 240 days with the company. If the employer fails to do so, it starts accumulating interest.
Pension refers to the fixed income provided to employees who have completed a minimum of 10 years of service at an organization. The employee can avail pension benefits by producing a ‘Scheme Certificate’ after their retirement or after 58 years of age, whichever is later. The employees are provided with the pension as a part of their Employment Provident Fund.
The normal deductions applicable to the salary are also applicable for the full and final settlement. Deductions such as professional tax, income tax, provident fund as well as any deduction in cases where the entire notice period was not served, are deducted before arriving at the final full and final payment amount.
The Full and Final Calculation is performed by taking into account all of the various elements mentioned above. After adding the leaves encashed, pension (if applicable), gratuity (if applicable), pending bonuses and arrears, unpaid salary, and deducting the necessary deductions, the full and final amount is calculated and it is provided to the employee, in the same manner, the salary was provided to the employee.
The HR department is the one that undertakes the process of the full and final calculation. it might be calculated for each resigning employee individually or in batches, for a larger organization. They are also tasked with deducting the necessary taxes to ensure that all statutory compliances are maintained.
Nowadays, these calculations are performed with the help of software, with modern software even automating the entire process with minimal to no human intervention. Hence, it is advisable to have a robust HRMS system like Pocket HRMS to complete this process error-free, quick and efficient.
If we are to summarize the process of full and final calculation, it will follow the below-mentioned order:
Step 1 – The employee submits their resignation to the HR team.
Step 2 – The company’s management accepts the resignation after reviewing the employee’s resignation letter.
Step 3 – The employee ensures that no dues are pending towards any department by collecting the certificate for the same from the relevant department.
Step 4 – The HR arrives at the exact full and final amount by performing the calculations.
Cloud-based software remains updated with the latest information thus ensuring efficient operations and timely FnF disbursal
Since the employee details are linked with the assets provided by the company, they can be easily tracked and recovered
An intuitive dashboard provides a bird's eye view of the employees under the exit process so that you can remain up to date
Automated calculations and internal cross verifications ensure that there are no errors in the FnF amount being sent to the employee
Simple exit surveys help the employee provide valuable feedback and honest opinion on their company for future improvement
The HR department can easily track the process with automated status updates for each employee and avoid any delays