Does a final settlement use one salary divisor?

There is no single divisor for every component. Salary proration, leave encashment and contractual notice recovery may use different bases. The tool exposes each divisor so you can enter the applicable policy or rule.

When does the gratuity estimate include five-year eligibility?

For ordinary retirement or resignation it requires five years of continuous service. Death or disablement has a different condition. The tool does not resolve the disputed four-years-and-240-days position.

Does an eleven-month fixed-term contract qualify for gratuity?

The Ministry's 2026 FAQ states one year of service under the contract for fixed-term gratuity. This tool uses that condition and does not treat all contractor employees as fixed-term direct employees.

Which wages should be used for gratuity?

Enter the applicable statutory wage under the Code on Social Security, including any required add-back. Basic pay alone may be insufficient. Use the linked wage-structure tool to inspect the wage definition.

Is the calculated settlement an after-tax bank payment?

Only the TDS and other deductions you enter are subtracted. The tool does not decide the tax exemption for gratuity or leave encashment and does not automatically compute settlement tax or PF.

What happens if notice recovery exceeds the amount due?

The result remains signed and shows a possible amount payable by the employee. A negative arithmetic result does not establish that the recovery is enforceable; check the contract and applicable wage-deduction rules.

Full and Final Settlement Calculator India

Build an itemised exit settlement. Enter the wage basis and the contract terms; the calculator keeps salary, leave, notice pay, gratuity and deductions separate.

Rules last verified 2026-10-08

This is an information tool, not advice. It performs the arithmetic and the screening you see below on the information you give it. It does not decide whether a position is lawful, compliant or correct, it is not a substitute for professional advice, and GHR assumes no duty of care to you in respect of it.

Service and gratuity conditions

Joining date

Final working date (included)

Employment

Exit reason

Monthly statutory gratuity wage (₹)

Establishment coverage and continuous service confirmed

The wage may include add-backs under the Code; it is not automatically basic + DA. Interrupted service and disputed eligibility need a separate review.

Salary, leave and notice

Unpaid-period monthly gross (₹)

Paid days in unpaid period

Salary proration divisor

Monthly leave-encashment wage (₹)

Approved leave days payable

Leave wage divisor

Monthly notice wage (₹)

Notice days receivable / recoverable

Notice wage divisor

Notice treatment

Other agreed payments (₹)

Verified settlement TDS (₹)

Other verified deductions (₹)

Itemised settlement

Continuous service assumed: 6 completed years (2382 days). Gratuity included on 7.000 qualifying years, capped at ₹20 lakh.

Unpaid salary: ₹7,741.94
Leave encashment: ₹5,000.00
Notice recovery: ₹0.00
Gratuity estimate: ₹1,05,000.00
Other agreed payments: ₹0.00
Entered TDS: ₹0.00
Other verified deductions: ₹0.00

Estimated amount payable to employee: ₹1,17,741.94

Notice recovery is arithmetic under your entered terms, not a ruling on enforceability. Tax, PF and exemptions are not automatically calculated. Enter the verified deductions above.

Use a separate basis for each settlement component

Start with unpaid salary for the final payroll period. Then add leave encashment and any verified bonus or reimbursement. Keep notice receivable and notice recovery separate; the contract and applicable law determine whether either is due.

The gratuity estimate assumes confirmed continuous service, a covered establishment and the statutory wage you enter. Ordinary resignation uses five completed years; the Ministry FAQ specifies one year under a fixed-term contract. Death and disablement waive the ordinary minimum service condition.

This is an itemised gross settlement with entered deductions. Tax exemptions, retrenchment compensation, disputed recoveries and eligibility questions require a separate review.

Worked example

At ₹30,000 monthly gross, 10 paid days and a 30-day salary divisor give ₹10,000 salary due. Five days of leave at ₹26,000 monthly leave wages and a 26-day divisor add ₹5,000. Gratuity and deductions are then shown separately.

Read the supporting guide

Read the records, assumptions and steps behind this tool. Source review: 2026-10-08. Review the relevant authority again before a filing or settlement.

Questions people actually ask

Does a final settlement use one salary divisor?: There is no single divisor for every component. Salary proration, leave encashment and contractual notice recovery may use different bases. The tool exposes each divisor so you can enter the applicable policy or rule.
When does the gratuity estimate include five-year eligibility?: For ordinary retirement or resignation it requires five years of continuous service. Death or disablement has a different condition. The tool does not resolve the disputed four-years-and-240-days position.
Does an eleven-month fixed-term contract qualify for gratuity?: The Ministry's 2026 FAQ states one year of service under the contract for fixed-term gratuity. This tool uses that condition and does not treat all contractor employees as fixed-term direct employees.
Which wages should be used for gratuity?: Enter the applicable statutory wage under the Code on Social Security, including any required add-back. Basic pay alone may be insufficient. Use the linked wage-structure tool to inspect the wage definition.
Is the calculated settlement an after-tax bank payment?: Only the TDS and other deductions you enter are subtracted. The tool does not decide the tax exemption for gratuity or leave encashment and does not automatically compute settlement tax or PF.
What happens if notice recovery exceeds the amount due?: The result remains signed and shows a possible amount payable by the employee. A negative arithmetic result does not establish that the recovery is enforceable; check the contract and applicable wage-deduction rules.

Sources

Code on Social Security, 2020 — coverage and gratuity https://labour.gov.in/sites/default/files/ss_code_as_passed_by_lok_sabha.pdf
Ministry of Labour — 2026 clarifications https://www.labour.gov.in/static/uploads/2026/03/a4ccf4c6d97c4f1f36a6d83f8c64213d.pdf

Where an official source could not be retrieved or read, this page says so instead of citing a substitute. A figure whose citation cannot be produced is a figure this site will not publish.

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Important — please read before relying on this

This calculator is a self-help information tool. It is not legal, tax, accounting, payroll or other professional advice, and it is not an opinion of any kind. GHR Consultancy is not acting for you, and no adviser, client, fiduciary or other professional relationship is created by using it.

The tool and everything it produces are provided as is and as available, without any representation, warranty or guarantee of any kind, express or implied, including as to accuracy, completeness, correctness, reliability, fitness for a particular purpose or freedom from error. GHR does not represent that the statutory position stated is current, complete, or applicable to your establishment.

The output is not a compliance certificate, clearance, approval, verification, audit or determination of any kind. It must not be relied upon and must not be used as a substitute for advice from a qualified professional. GHR assumes no duty of care to you or to any other person in respect of it. Any reliance you place on it is entirely at your own risk.

In particular, it does not:

confirm legal coverage or eligibility from incomplete employment records;
replace a filing, a portal record or a review of an authority's latest notification;
store or transmit documents and entered amounts.

The position stated on this page is stated as at 2026-10-08. Statutory positions change, sometimes with retrospective effect, and GHR does not undertake to update this page. Do not assume it reflects the law at any later date.

To the fullest extent permitted by law, GHR Consultancy and its partners, employees and agents exclude all liability for any loss, damage, cost or expense of any kind — including indirect or consequential loss, loss of profit, and any regulatory, statutory or contractual consequence — arising out of or in connection with the use of, or reliance on, this tool or anything it produces, whether in contract, tort (including negligence), statute or otherwise.

If you need a determination for your establishment, that is a separate professional engagement and the only basis on which GHR can advise you. Obtain professional advice before acting on anything shown here.

These terms are governed by the laws of India, and the courts at Kerala have exclusive jurisdiction.

Page last reviewed 2026-10-08. Sources, assumptions and scope are listed on this page. Core statutory rules are also held with dated effective windows and notification references. See how the rules engine works.