When an employee leaves, you have 30 days to settle all dues. Get the math wrong, and you're facing labour complaints. This calculator handles everything: earned leave encashment, gratuity (with the ₹20 lakh cap), notice period recovery, pro-rata bonus, and TDS. Enter employee details, and the net F&F amount calculates automatically. Updated May 2026.
The main sheet. All earnings on one side: salary for days worked, EL encashment, gratuity, notice pay, pro-rata bonus, reimbursements, and other earnings. All deductions on the other: notice recovery, salary advance, loan, asset recovery, other deductions, and TDS. Net F&F payable calculated automatically.
Input all exit-related information here: employee name, designation, date of joining, last working day, monthly salary, notice period, exit reason (resignation, termination, retirement, or contract end). Everything flows into the F&F Calculator from this sheet. If you're managing shift schedules, having accurate dates of service makes F&F calculation much easier.
Step-by-step gratuity calculation with eligibility check. Did the employee complete 5 years? The sheet checks automatically. If yes, it applies the formula: (15 x Last Drawn Salary x Years of Service) / 26. The ₹20,00,000 cap is enforced, so you don't accidentally overpay.
Key terms explained in plain language. What counts as "Basic" for gratuity? How do you calculate days worked in the last month? Which formula applies to EL encashment? Legal references to the Payment of Gratuity Act 1972 and relevant Shops & Establishments Acts included.
Amit Patel, Head Chef, 6 years 3 months of service, ₹35,000 monthly gross salary. The example walks through every earning and deduction line to arrive at ₹60,613 net F&F. Use it as a reference before filling in your own employee's data.
An employee resigns. You promise their full and final settlement "within a few weeks." Three months later, they're still calling. Sound familiar?
Most state Shops & Establishments Acts require employers to settle F&F dues within 30 days of the last working day. Miss that deadline, and the former employee can file a complaint with the labour department. These complaints aren't rare. They're routine.
The bigger problem isn't delay. It's accuracy. Gratuity alone trips up most businesses. The formula under the Payment of Gratuity Act, 1972 (Section 4) uses "last drawn salary" and divides by 26, not 30. Many employers use 30 by mistake and underpay. Others forget the ₹20,00,000 cap (revised by Central Government notification in 2019) and overpay high-tenure senior staff.
Then there's earned leave encashment. Should it be calculated on Basic salary or Gross? The answer depends on your company policy and state rules. Getting this wrong by even one component can mean a difference of ₹5,000-15,000 per employee.
Notice period recovery is another area of confusion. If an employee leaves without serving full notice, you can recover that amount. But you can't just deduct their entire last month's salary. The recovery is proportional to the shortfall in notice days, calculated on gross salary.
This calculator puts all of these calculations in one place. Enter the employee's details, dates, salary, and exit reason. The template calculates every component, checks gratuity eligibility, applies the cap, and gives you the net F&F amount. No manual formula juggling. No second-guessing whether you remembered everything. If you also need to verify salary structure and CTC breakup before the settlement, that template pairs well with this one.
Businesses using Petpooja Payroll automate the entire F&F process, from gratuity computation to final payslip generation. But if you're not there yet, this Excel template is the next best thing.
Here's how the calculator works for the pre-filled example, Amit Patel, Head Chef:
Maximum gratuity payable under the Payment of Gratuity Act, 1972. Revised upward from ₹10,00,000 by Central Government notification in 2019. Any amount above this cap is ex-gratia, not statutory.
Source: Central Government notification, March 2019, amending Section 4(3) of the Payment of Gratuity Act, 1972Minimum continuous service required for gratuity eligibility. Section 4 of the Payment of Gratuity Act, 1972 is clear on this. There's one exception: if an employee dies or becomes disabled, the 5-year condition is waived.
Source: Payment of Gratuity Act, 1972, Section 4(1)The deadline most state Shops & Establishments Acts set for settling full and final dues after an employee's last working day. Delay beyond this opens the door to labour department complaints.
Source: Most state Shops & Establishments Acts (varies by state)The Payment of Gratuity Act specifies the divisor as 26 (working days in a month), not 30 (calendar days). Using 30 means you're underpaying gratuity by roughly 15%. That's a valid legal dispute waiting to happen.
For long-tenure senior employees, the gratuity formula can produce amounts above ₹20 lakh. Anything above the cap is your choice to pay as ex-gratia, but it isn't a statutory obligation. Paying it by default inflates your exit cost.
Most company policies and state rules calculate earned leave encashment on Basic salary (or Basic + DA). Using Gross salary for the calculation inflates the payout. Check your company's leave policy and the applicable state Shops & Establishments Act before calculating.
Here's a detail many miss. If an employee has worked 4 years and 240 days (or 4 years and 190 days in certain establishments), some High Courts have ruled this counts as "5 years of continuous service." The Act's definition of continuous service includes partial-year calculations. Get legal advice before denying gratuity in borderline cases.
If an employee serves 20 days of a 30-day notice period, you can only recover 10 days' worth of salary, not the full month. The recovery must be proportional to the unserved portion. Deducting more is an overly aggressive move that invites a complaint.
Under the Payment of Bonus Act, 1965, employees who have worked at least 30 days in an accounting year are entitled to proportional bonus. If your business also handles PF and ESI compliance, the bonus component is easy to miss during exit processing. Many businesses skip this component in F&F, which is a compliance gap.
| Aspect | Manual Calculation | With This Calculator |
|---|---|---|
| Time per employee | 30-45 minutes (looking up formulas, checking eligibility) | Under 5 minutes (enter details, get net payable) |
| Gratuity eligibility | Manually count years and days of service | Auto-checks 5-year eligibility from joining and exit dates |
| Gratuity cap | Often forgotten, leading to overpayment | ₹20,00,000 cap enforced automatically |
| Formula accuracy | Divisor confusion (26 vs 30), component mix-ups | All formulas pre-built with correct divisors and references |
| Deduction tracking | Scattered across multiple files and registers | Single sheet: notice recovery, advances, loans, assets, TDS |
| Audit trail | No record of how the amount was calculated | Every formula visible, every component documented |
| Compliance risk | High (missed components, wrong formulas) | Low (all statutory components included with legal references) |
Download the free calculator and get the exact settlement figure in 5 minutes.
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.
Petpooja Payroll auto-calculates full and final settlement including gratuity, EL encashment, notice recovery, and TDS. Generate the F&F statement, get it approved, and send it to the employee, all from one dashboard. No spreadsheets, no formula errors.
