🤝 Gratuity & Full & Final Settlement

Every employee exit handled cleanly -
gratuity calculated, F&F settled

Gratuity accrues from the first day of joining. When an employee exits, CrmLeaf calculates the full F&F - pending salary, leave encashment, gratuity, PF status, TDS reconciliation - and produces a settlement summary in minutes, not days.

Gratuity auto-calculationF&F settlement workflowIndia Payment of Gratuity Act 1972GCC end-of-service gratuityLeave encashmentTDS reconciliation on exit
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CrmLeaf HRMS - Gratuity & F&F Settlement
42
Exits this quarter
₹0
Disputed settlements
3.2d
Avg F&F processing
F&F Settlement - Rahul Sharma
RS
Pending salary - 18 days
₹27,692
Calculated ✓
LE
Leave encashment - 12 days EL
₹18,462
Calculated ✓
GT
Gratuity - 6 years 4 months
₹1,15,385 (Gratuity Act)
Calculated ✓
PF
PF - Transfer / Withdrawal
UAN: 1002348xxxx
Pending choice
Net F&F Payable₹1,61,539 · TDS deducted: ₹0 (below threshold) · Ready for approval
How it works

Step by step - from setup to outcome

1

Gratuity accrues from day one - automatically

From the date of joining, CrmLeaf tracks gratuity accrual for every employee. For India, the Payment of Gratuity Act 1972 formula applies: (Last drawn salary × 15 × completed years of service) ÷ 26. For GCC employees, end-of-service gratuity accrues per the applicable country labour law. The accrued liability is always visible - no manual calculation at exit.

Why this matters: Most companies discover the gratuity liability at exit and scramble to calculate it. CrmLeaf shows the accrued liability on every employee's profile - finance can provision for it quarterly.
Gratuity CalculatorPayment of Gratuity Act 1972GCC labour law
2

Resignation or termination triggers the F&F workflow

When an employee's exit is confirmed in Employee Records, the F&F Settlement workflow starts automatically. The last working day is set, the notice period status is confirmed (served in full, buy-out, or waived), and the settlement calculation begins. All pending items are pulled from the connected modules - no chasing data across systems.

F&F SettlementsNotice period managementExit confirmation
3

F&F components calculated - salary, leaves, gratuity, deductions

The system calculates: (1) Pending salary for days worked in the last month, (2) Leave encashment for unused earned leave balance, (3) Gratuity amount per the applicable formula, (4) Deductions - notice period shortfall recovery, loan recovery, canteen balance. Each line item is shown with its source calculation so the employee can verify.

⚠️India compliance: Gratuity is payable only after 5 years of continuous service. Under the Payment of Gratuity Act 1972, payment must be made within 30 days of the last working day. Delay attracts simple interest at 10% per annum.
Leave encashmentSalary calculationLoan recovery
4

TDS reconciliation and Form 16 Part B generated

At exit, CrmLeaf reconciles TDS deducted vs TDS payable for the financial year up to the exit date. If excess TDS was deducted, the refund is included in the F&F. Form 16 Part B (showing total income and TDS for the year) is generated automatically and published to the employee's self-service portal.

TDS reconciliationForm 16 Part BExcess TDS refund
5

Asset recovery checklist and final approval

The asset recovery checklist - auto-generated from every asset assigned at onboarding - is attached to the F&F settlement for sign-off. Once all assets are returned, HR approves the settlement. The net payable amount is pushed to payroll for disbursement. PF withdrawal or transfer instructions are generated for submission to the EPFO.

Asset recoverySettlement approvalPF withdrawal/transfer
Key capabilities

Everything in the Gratuity & F&F Settlement module

🧮
Gratuity calculator - India & GCC
India gratuity calculated under the Payment of Gratuity Act 1972: (Basic + DA × 15 × years) ÷ 26. GCC end-of-service gratuity calculated per UAE, Saudi, Qatar, Kuwait, Bahrain, and Oman labour law. Accrual tracked from day one.
📋
Complete F&F settlement workflow
Structured exit workflow covering every settlement component - pending salary, leave encashment, gratuity, bonus pro-rata, deductions (notice shortfall, loan recovery), and TDS reconciliation. All calculated from existing data.
🌴
Leave encashment calculation
Unused earned leave balance (and any other encashable leave types configured) is automatically calculated at exit - per day rate applied, tax treatment confirmed, and the encashment amount added to the F&F.
📄
TDS reconciliation & Form 16 Part B
TDS deducted vs payable reconciled at exit. Excess TDS refunded in F&F. Form 16 Part B (income and TDS for the financial year to exit date) auto-generated and published to the employee's self-service portal.
💻
Asset recovery checklist
Every asset assigned at onboarding automatically appears on the exit checklist. F&F approval is gated on asset clearance sign-off - laptops, phones, access cards, vehicles, and any other tracked asset.
📊
Gratuity liability reporting
Real-time gratuity liability across all eligible employees - by department, location, and tenure band. Finance teams use this for quarterly provisioning and actuarial valuation inputs.
Platform integration

F&F Settlement is the endpoint of the employee lifecycle - it pulls from every upstream module

Salary comes from Payroll. Leave balance comes from Attendance. Assets come from Employee Records. TDS history comes from Payroll. The F&F settlement is automatic because every data source is already in the platform.

From
Employee Salary
→
From
Leave Balance
→
This module
F&F Settlement
→
To
Final Payroll Run
→
To
TDS Records
30 days
Maximum time allowed to pay gratuity after exit (India) - CrmLeaf settlement typically done in under 4 days
100%
F&F components calculated automatically - no manual spreadsheet needed for any exit
0
Disputes from miscalculated F&F - itemised settlement summary eliminates "where did this number come from" questions
Day 1
Gratuity accrual starts from joining date - not calculated retroactively at exit

Tutorial: Process your first F&F settlement in CrmLeaf HRMS

From exit confirmation to settlement approval - complete walkthrough including gratuity, leave encashment, and TDS reconciliation.

Read tutorial →
Questions

Gratuity & F&F Settlement - FAQ

CrmLeaf uses the statutory formula: (Basic Salary + DA) × 15 × Completed Years of Service ÷ 26. "Completed years" is calculated to the last completed 6 months - so 6 years 7 months counts as 7 years. Gratuity is payable after 5 years of continuous service. The calculator accounts for partial year rounding per the Act and applies the ₹20 lakh tax-free threshold automatically.
Yes. CrmLeaf calculates end-of-service gratuity per each GCC country's labour law. UAE: 21 days per year for the first 5 years, 30 days per year thereafter (capped at 2 years' salary). Saudi Arabia: similar formula under Saudi Labour Law Article 84. Qatar, Kuwait, Bahrain, and Oman each have their own formula - all are configurable in the Tax Configuration module.
In India, gratuity is not payable if the employee has less than 5 years of continuous service (except in case of death or disability). CrmLeaf's F&F workflow flags this automatically - gratuity line item shows ₹0 with the reason "less than 5 years of service". Leave encashment, pending salary, and other components are still calculated and included.
CrmLeaf generates the PF withdrawal or transfer request documentation - with the employee's UAN, PF account number, and employment dates pre-filled. The employee chooses withdrawal or transfer in the self-service portal. The filled Form 19 (withdrawal) or Form 13 (transfer) is generated and submitted through the EPFO employer portal.
Related modules

What connects to Gratuity & F&F Settlement

💰
Payroll & Compliance
F&F settlement runs as a final payroll - salary, gratuity, and leave encashment disbursed through the same payroll engine.
See module →
📊
Salary Structure & CTC
Last drawn Basic salary from the salary structure is used as the base for gratuity and leave encashment calculation.
See module →
🌴
Attendance & Leave
Unused earned leave balance at exit date is pulled directly from the Leave module for encashment calculation in F&F.
See module →
Get started today

Every exit handled cleanly.
Gratuity calculated. Settlement closed.

Start your 15-day free trial. Process your first F&F settlement and see how every component - from gratuity to TDS reconciliation - calculates automatically.

Start Free Trial →Get Price Quote
15-day free trialNo credit card requiredFree migration (T&C)