01
Resignation Acceptance
Collect written resignation, acknowledge within 48 hours, verify notice period from the appointment letter, decide on serve/buyout/waive, and schedule the exit interview.
Attendo
Employee Exit / Offboarding Checklist for Indian Businesses (Free PDF)
An employee resigns. Now what? Most Indian SMEs wing it. The laptop sits on someone's desk for weeks. PF exit date never gets updated. The relieving letter takes 3 follow-ups. This checklist covers every step from resignation acceptance to the final F&F payout. No missed compliance, no forgotten assets, no angry ex-employees. Updated June 2026.
- 50+ items across 7 sections: resignation, handover, IT access, assets, F&F, compliance, post-exit
- F&F settlement components with legal references (Gratuity Act, PF Act, Payment of Wages Act)
- Works for any industry: restaurant, retail, manufacturing, healthcare, office, salon
No spam. Instant download link to your email.
Petpooja presents
Employee Exit / Offboarding Checklist
For Indian Businesses
7
Sections · PDF checklist
FY 2025-26
What's Inside
Seven sections covering every step of employee separation.
02
Knowledge Transfer & Handover
Written handover document, successor identification, shadow sessions, document ownership transfer, client introductions, and manager sign-off before the last working day.
03
IT & Access Revocation
Email deactivation, software access removal, biometric deactivation, WhatsApp group removal, shared password changes. All on the last working day.
04
Company Asset Recovery
Laptop, phone, ID card, keys, uniform, credit card, petty cash, confidential documents. Every item tracked with an asset return form signed by both parties.
05
Full & Final Settlement
Salary for days worked, leave encashment, gratuity (if 5+ years), notice recovery, advance deductions, bonus pro-rata, TDS. Need the actual numbers? Use our free F&F calculator.
06
Compliance & Exit Documents
PF exit date on EPFO portal, ESI final filing, Form 16 issuance, relieving letter, experience certificate, No Dues Certificate. Every document with its legal deadline.
07
Post-Exit Housekeeping
HRMS status update, attendance system cleanup, personnel file archival, org chart updates, third-party signatory changes, exit interview analysis.
Why This Matters
A Messy Exit Costs More Than You Think
When an employee leaves, most Indian SMEs focus on one thing: finding the replacement. The actual offboarding? It happens in bits and pieces over the next 2-3 months. That's where the problems start.
Here's what goes wrong. The employee's last day comes and goes. Nobody collects the laptop for a week. The POS admin password doesn't get changed. Three months later, the ex-employee's biometric still works at the door. The PF exit date never gets updated on EPFO, so they can't withdraw their PF at the new job. Now you're getting calls from someone who already left.
Then there's the F&F mess. The employee asks for their settlement. Finance says "we'll process it next month." Next month becomes two months. Under the Payment of Wages Act, wages must be paid within the prescribed period. Some state Shops & Establishments Acts mandate settlement within 2 working days. Delay long enough, and you'll hear from the Labour Commissioner.
The compliance gaps are the most dangerous. Not marking the Date of Exit on the EPFO portal means the employee's PF claim gets rejected. Not issuing Form 16 on time means they can't file their ITR. Not paying gratuity to someone with 5+ years of service is a violation of the Payment of Gratuity Act, 1972.
This checklist turns a chaotic process into a structured 30-day workflow. Pin it to the HR desk. Open it the day someone resigns. Work through it section by section. By the time you check the last box, every asset is recovered, every document is issued, and every compliance step is done.
Businesses using Attendo (formerly Petpooja Payroll) can automate most of this: F&F calculation, attendance deactivation, salary slip generation, and PF exit marking. But even with software, you need a checklist for the human steps. The exit interview. The handover sessions. The laptop collection. That's what this PDF is for.
Sample Preview
A look at what's inside the checklist.
Here are sample items from each section:
Resignation: Acknowledge in writing within 48 hours. Confirm notice period dates and LWD.
Handover: Get manager sign-off on handover completion before issuing the relieving letter.
IT Access: Deactivate email, revoke all software access, change shared passwords. All on LWD.
F&F Settlement: Gratuity formula: (Last drawn salary x 15 x years) / 26. Tax-free up to Rs 20,00,000.
Compliance: Update Date of Exit on EPFO portal within 15 days. Employee's PF claim gets rejected without this.
... plus asset recovery forms, document issuance timelines, post-exit housekeeping, and exit interview guidance. 50+ items total.
Key Facts
Exit compliance numbers every employer should know.
5 years
Minimum service for gratuity eligibility. After 5 years, the employer must pay gratuity even if the employee resigns (not just termination). Formula: (Basic+DA) x 15 x years / 26.
Source: Payment of Gratuity Act, 1972, Section 4Rs 20,00,000
Gratuity exemption limit under the Income Tax Act. Gratuity up to Rs 20 lakh is tax-free for private sector employees. Amounts above this are taxable as salary income.
Source: Income Tax Act, Section 10(10)15 days
Recommended timeline for marking Date of Exit on the EPFO portal. Without this, the employee's PF withdrawal or transfer claim will be rejected. Many employers forget this step entirely.
Source: EPFO member portal requirements
Common Mistakes
6 Offboarding Mistakes Indian Employers Keep Making
01
Not collecting resignation in writing
Verbal resignations create disputes. "I never resigned, I was fired" is a common claim at Labour Courts. Always get it in writing with the intended LWD. Email counts. WhatsApp doesn't hold up as well.
02
Forgetting to mark Date of Exit on EPFO
This is the single most common offboarding failure. Without the DOE on the UAN portal, the ex-employee can't withdraw or transfer their PF. They'll call you, email you, and eventually complain to EPFO. Update it within 15 days of LWD.
03
Delaying F&F settlement for months
Some employers take 60-90 days to process F&F. The Payment of Wages Act requires timely payment. Maharashtra's Shops & Establishments Act mandates settlement within 2 working days. Delayed F&F is one of the top reasons ex-employees file complaints.
04
Not revoking IT access on the last day
An ex-employee with active email, CRM, or POS access is a data breach waiting to happen. Deactivate everything on LWD evening. Don't wait until "IT gets around to it."
05
Skipping the exit interview
A proper exit interview is your best source of honest feedback. The person leaving has nothing to lose. If 3 out of 5 exits cite the same manager or the same issue, that's a pattern you need to fix. Skip it and you lose the data.
06
Not issuing the relieving letter on LWD
The employee needs the relieving letter to join their next company. Holding it as "leverage" until they finish pending work is a bad practice that damages your reputation. Issue it on the last day if handover is complete.
Comparison
Onboarding vs Offboarding: two sides of the same coin.
| Aspect | Onboarding | Offboarding |
|---|---|---|
| PF | Register UAN, file nomination | Mark Date of Exit on EPFO portal |
| ESI | Register employee, issue IP card | File last month's contribution |
| Documents issued | Offer letter, appointment letter | Relieving letter, experience certificate, Form 16 |
| Assets | Issue laptop, ID card, access | Recover everything, signed return form |
| System access | Create accounts, grant access | Revoke everything, change shared passwords |
| Compliance deadline | PF registration within first month | F&F within 30 days, EPFO exit within 15 days |
| Checklist available | Employee Onboarding Checklist | This checklist (download above) |
Don't let exits become compliance gaps.
Download the free checklist and handle every separation systematically.
FAQ
Frequently asked questions.
What is Full and Final Settlement (F&F)?
F&F is the final payment an employer makes to a departing employee. It includes: salary for days worked in the last month, leave encashment for unused earned leave, gratuity (if eligible after 5 years), any pending bonus or incentives, minus deductions like notice period recovery, salary advances, unreturned asset value, and TDS. The net amount is the F&F payout. Most employers should process this within 30 days of the last working day. If you need help with the actual math, our F&F settlement guide walks through every component.
Is the employer required to issue a relieving letter?
There's no central law that mandates a relieving letter by name. But state-specific Shops & Establishments Acts in many states require employers to issue a service certificate or termination notice. Practically, every next employer asks for it. Not issuing one creates unnecessary friction and damages your reputation as an employer. Best practice: issue it on the last working day once handover is confirmed complete.
When is gratuity payable on exit?
Gratuity is payable when an employee leaves after completing 5 continuous years of service. This applies to resignation, retirement, and termination. The formula is: (Last drawn Basic + DA) x 15 x completed years of service / 26. The Payment of Gratuity Act, 1972 requires payment within 30 days of the date it becomes payable. Gratuity up to Rs 20,00,000 is tax-free for non-government employees. Even one day short of 5 years means no gratuity (unless the employment agreement says otherwise). Our gratuity calculation guide walks through the full formula with examples.
How long should the company retain ex-employee records?
Different laws specify different retention periods. The Payment of Wages Act requires maintaining registers for 3 years. The Factories Act requires 5 years. PF records should be kept for 5 years after the employee leaves. Best practice for Indian SMEs: keep all employee files (physical and digital) for at least 5 years after exit. Some legal advisors recommend 8 years to cover any limitation period for potential disputes. Tracking attendance and leave records digitally makes long-term archival much easier.
What happens if the employer doesn't update the PF exit date?
The employee's PF withdrawal claim gets rejected by EPFO. They can't transfer PF to their new employer either. This means your ex-employee will keep contacting you to update the Date of Exit on the UAN portal. It's a 2-minute task that, if forgotten, creates weeks of back-and-forth. Log into the EPFO employer portal, go to Member > Mark Exit, and enter the last working date. Do it within 15 days of the employee's exit. If you're managing PF and ESI compliance properly, this should be on your standard checklist.
About Petpooja
Petpooja is India's leading SME business software suite, trusted by 1,50,000+ businesses across restaurants, retail, healthcare, manufacturing, and more. From billing and payroll to task management and procurement, Petpooja helps Indian businesses run better, every day.
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