How fast must full and final settlement be paid in India?
Full and final settlement in India falls under section 17 of the Code on Wages: wages payable to an employee who resigns, is dismissed or is retrenched must be paid within two working days. Gratuity must be paid within 30 days of becoming payable. Company policy may describe a longer "F&F cycle", but it cannot lower the Code's minimums.
At a glance
- Wages due on exit: within two working days of the exit event (Code on Wages, section 17(2)).
- Leave encashment: wages in lieu of leave before the end of the second working day after quitting (OSH Code, section 32).
- Gratuity: within 30 days of becoming payable (Code on Social Security).
- Deductions: only those the Code authorises, up to 50% of wages in a wage period.
What goes into full and final settlement (F&F) in India?
| Component | Basis | Timing |
|---|---|---|
| Salary up to last working day | Code on Wages | Two working days |
| Encashment of accrued leave | OSH Code section 32 | Second working day for quitting |
| Gratuity, if eligible | Code on Social Security | 30 days from becoming payable |
| Bonus due | Code on Wages section 26 | As per the bonus rules |
| Retrenchment compensation | Industrial Relations Code | On retrenchment |
| Less: authorised deductions | Code on Wages section 18 | With the payment |
"Two working days" in practice
The Code uses "within two working days of his removal, dismissal, retrenchment or, as the case may be, his resignation". Employers sometimes read the final working day, the date of acceptance or the date notice ends as the trigger. The Code text refers to resignation, and a government can set a different time limit for specific cases under section 17(3). Check any state rule that applies to your establishment.
Notice period, buyouts and recoveries
Recoveries from final pay must fit the Code's list of authorised deductions. If you are unsure whether a recovery, such as a notice shortfall, is allowed, ask for the clause in your contract and the payslip breakup. Read notice period in India.
If payment is late
Keep your resignation acceptance, relieving date and payslips. Raise it in writing with HR. The Code provides for Inspector-cum-Facilitators and enforcement through the labour authorities of the appropriate government. Seek legal advice if the amount is disputed.
Documents
A relieving letter and experience letter are not part of payment timelines. See relieving letter. For the term itself, see F&F settlement.
Sources
- The Code on Wages, 2019 (official text), https://www.labour.gov.in/static/uploads/2025/06/c328da14bbb15fc4ad571dc33e7a4ab3.pdf, checked 2026-10-31
- The Occupational Safety, Health and Working Conditions Code, 2020 (official text), https://www.labour.gov.in/static/uploads/2025/07/36fcfa5d8e6b9145e282bf7b950d6c47.pdf, checked 2026-10-31
- The Code on Social Security, 2020 (official text), https://www.labour.gov.in/static/uploads/2025/07/b0620548445580767b5c0d18c95c26f7.pdf, checked 2026-10-31
- Ministry of Labour and Employment, Compliance Handbook for Employers under the Four Labour Codes (Central Government sphere), https://www.labour.gov.in/static/uploads/2026/02/83978455025732b99b0165def80ab171.pdf, checked 2026-10-31
- Ministry of Labour and Employment, Additional FAQs on Labour Codes (as on 16 Mar 2026), https://www.labour.gov.in/static/uploads/2026/03/a4ccf4c6d97c4f1f36a6d83f8c64213d.pdf, checked 2026-10-31
This is general information, not legal, tax or immigration advice. Rules change and your situation may differ. Consult a licensed attorney or qualified adviser.