Easy to Use Legal Templates
Quickly and easily create any legal agreement for you or your team.
Affordable Plans
Straightforward pricing plans and bespoke packages built to simplify all your legal demands.
Vast Document Library
Zegal’s comprehensive collection of agreements means you always have what you need at your fingertips.
How to create a Full and Final Settlement Letter
Why choose Zegal?
With Zegal, you can reduce legal risks and improve the efficiency of your contract workflow, allowing you to focus on your core business operations.
Our platform is flexible, scalable, and tailored to the needs of your business.
What is a full and final settlement letter?
A full and final settlement letter is used to pay an employee their remaining due or settlement while resigning from the organization. It is also known as an FNF settlement. The process results in an employee getting paid for the last working month net of tax deductions. A full and final settlement letter is handled by the human resource department in an organization and might take around a month for full settlement.
What is included in the full and final settlement letter?
A FNF settlement is used to settle an employee’s final remuneration while resigning from an organization. These are the important things included in a full and final settlement letter. Unpaid salary: This includes the total number of days an employee has worked in an organization after submitting the resignation. Normally an employee has to serve the organization for 1 to 3 months after submitting the resignation letter. All the payments incurred in those times should be paid while leaving the organization. Unpaid bonus: When an organization makes a certain level of profit or achieves their financial target then the employee will get rewarded as a form of bonus. These bonus payments should be settled while an employee leaves the organization. Payment for remaining leaves: In any organization, the leaves are divided into several categories like sick leave, casual leave and privilege leave, etc. if an employee has not used their privilege leave in a year, he/she will get paid for those leaves while leaving the organization. Pension: Pension is the retirement benefit an employee will get after serving an organization for a longer period of time. All the information regarding pension deductions is clearly stated in a full and final settlement letter. Deductions: While leaving any organization, the full and final settlement letter contains all the information regarding the tax deductions and provident fund income before paying the employees.
What is the period of settlement?
When an employee wants to leave an organization, they have to go through a lot of processes normally handled by the human resource department. They have to sign the exit formalities, return any belongings taken from the organization like laptops and mobile and get the signature from their immediate supervisor. After completing all the paperwork, it might take around 30-40 days for full and final settlement depending upon the organization’s policies and applicable government laws.
How do I make a full and final settlement?
The procedure to make a full and final settlement is quite simple. It should go as per the guidelines set out in one’s appointment contract. Depending upon company policy, employers can either relieve employees first and then make the FnF settlement or they can make the final settlement first followed by relieving the employee.
Conclusion
A full and final settlement letter is used by the human resource department when an employee wants to leave the organization. The main purpose of using this letter is to compensate the employees for their efforts during the job period.
You Might Also Like
Along with this document, make sure you see these other templates in our library:
The Zegal template library
Zegal's legal template library is a list of essential business documents for your everyday needs.
Whether you're a startup, SME, or a larger enterprise, Zegal contract management will automate and speed up your legal processes.
Using Zegal will reduce risk, save money, and improve efficiency. Let us take care of the paperwork so you can focus on running your business.
Nice things people say about Zegal.
"Using Zegal allows us to take a lean and efficient approach that cuts costs while maximising results."
Alex So
Managing Partner
"Zegal is easy to use and customer service is responsive and helpful! I strongly recommend it!!"
Alan NG
CEO
"Zegal makes onboarding a new client or employee fast and simple."
Veronika Kuznetsova
Managing Director
“Zegal really works well for all our legal documentation needs, and it is also user-friendly and mobile at the same time.”
Daniel W. Ho
Managing Director & Principal Consultant
“Zegal is like my teammate, helps me draft the right template, quickly gets my work done, and also saves me money on legal needs.”
Alan Schmoll
CEO & Co-Founder
“With colleagues, partners, and clients across the globe, Zegal provides an easy-to-use tool that streamlines processes that saves costs and time.”
Tony Wines
CEO of Turnkey
“Zegal has been such a great help in my business operations.”
Amanda A Atan
Managing Director at VIBES Mastery
“With Zegal, we work smarter rather than harder. Being a business professional, a proper document management system is always a must.”
Edgar Kautzner
Managing Consultant
“Zegal, a platform for compact package of legal templates, secured e-signing, reasonable cost and high level customer service.”
Paul Falzon
Director
“Zegal is easy to use, affordable and the platform is simple to navigate which makes the process of putting together a document fast and fuss-free.”
Jonathan Wong
Founder & Managing Director
“Love the new flow/design, very quick and easy to use now. I have done 2 or 3 customer contracts in a flash over the past 2 days.”
Chris Head
General Manager and Managing Editor
“Consistently positive experiences with Zegal’s technology, and customer services teams, who ensure that our issues or questions are responded to immediately.”
Tony Wines
CEO of Turnkey