⚠ New Labour Code in effect since 21 November 2025: F&F wages must be settled within 2 working days of an employee's last day.
Labour Code 2025 Compliant

F&F Settlement in 2 Days.
Not 45.

Last updated:

India's new Code on Wages mandates Full & Final Settlement within two working days. Offrd automates every component, every calculation, every document so your team can actually meet that deadline.

Sign Up Free Get a Demo
F&F Settlement Timelines at a Glance
2 Days
Final wages & salary dues — Section 17(2), Code on Wages 2019. Covers all employees regardless of salary level or employment category.
30 Days
Gratuity — Payment of Gratuity Act. Applicable after 5 years of continuous service.
Same Year
Bonus — Within the applicable accounting year under the Payment of Bonus Act.
3000+
Companies trust Offrd
350+
Cities across India
₹6B+
Offer letters processed
₹99
Pricing starts at
The Law Changed

What the New Labour Code Actually Says

Effective 21 November 2025, the old 30 to 45 day window is no longer the standard for wage payments.

Before November 2025
45

Days was the informal norm

Most Indian companies took 30 to 45 days, and often longer, to settle final dues. Some stretched to 90. There was no enforceable hard deadline for wage settlement specifically.

From November 2025 Onwards
2

Working days for wage settlement

Section 17(2) of the Code on Wages 2019 is now enforceable. Final wages must be paid within two working days of the employee's last day, covering all separations: resignation, termination, retrenchment, and retirement.

The Nuance You Should Know

Wages vs. Full F&F: They are not identical

The 2-day mandate clearly covers earned wages and final salary. Gratuity retains its 30-day timeline. Bonus follows the accounting year. Pending government clarification, your F&F documentation should itemise these components with separate stated timelines, not one aggregate date. Treating everything as a single 2-day obligation may be overstated, but treating wages as exempt from it is non-compliant.

Documentation Checklist

What Full & Final Settlement Must Include

Every document and every payment component that belongs in a compliant F&F settlement under Indian labour law.

Payment Components

Pro-rated salary for the last working month
Unused earned leave encashment (per Shops & Establishment Act)
Gratuity if 5 or more years of continuous service (Payment of Gratuity Act, 1972)
Bonus dues under the Payment of Bonus Act, where applicable
Pending expense reimbursements
Notice pay recovery or payout depending on who served notice

Documents to Be Exchanged

F&F settlement letter with itemised payment breakup
Relieving letter confirming last working day and no pending dues
Experience letter
Form 16 or salary TDS certificate
PF transfer or withdrawal form (Form 13 or Form 19/10C)
No-dues certificate signed by IT, admin, and accounts

What the Settlement Letter Must State

Employee name, designation, department, and employee ID
Date of joining and last working day
Itemised statement of all amounts payable and deductions
Net payable amount and mode of payment
Component-wise payment timelines (wages vs. gratuity vs. bonus)
Authorised HR or finance signatory
Employee acknowledgment and acceptance signature

Statutory Deductions to Account For

PF settlement or transfer details
TDS on gratuity, bonus, and leave encashment where applicable
Recovery of salary advances or outstanding loans
Professional tax deductions where state-mandated
Often missed: If the employee held a bond, non-compete, or confidentiality agreement, confirm in writing whether those obligations survive the separation. Reference them explicitly in the settlement letter. Silence on this later becomes a litigation risk.
How Offrd Helps

Everything You Need to Hit the 2-Day Window

Offrd brings all the moving parts of F&F settlement into one place so your HR team is not scrambling across spreadsheets on someone's last day.

📄

Separation Letter Generation

Generate compliant separation and relieving letters in minutes with pre-built templates tailored to Indian labour law requirements.

🧮

Automated F&F Calculations

Pro-rated salary, leave encashment, gratuity eligibility, and deductions all calculated from your existing employee data. No manual arithmetic.

✅

No-Dues Workflow

Route no-dues clearance across IT, admin, and finance simultaneously. No more waiting on email threads to collect signatures one by one.

📊

Itemised Settlement Letter

Auto-generate a component-wise F&F letter with separate timelines for wages, gratuity, and bonus. Exactly what the new Labour Code expects.

🗂️

PF and Statutory Document Handling

Track PF transfer and withdrawal forms alongside the rest of the settlement. Keep every statutory document in one auditable record.

🔔

Deadline Alerts

Offrd flags the 2-day wage window and 30-day gratuity window the moment a separation is initiated. Your team knows what is due and when.

Common Questions

F&F Settlement: What People Ask

Straight answers on the questions Indian HR teams are dealing with right now.

Yes. Section 17(2) of the Code on Wages applies uniformly to all employees regardless of salary level, designation, or employment category. There is no carve-out for senior or contractual staff.
No. Gratuity retains its separate 30-day timeline under the Payment of Gratuity Act, 1972. The 2-day mandate in the Code on Wages covers earned wages and final salary. Pending further government clarification, it is advisable to state each component with its own timeline in your F&F documentation rather than treating everything as a single payout.
This is one of the most discussed operational challenges under the new rule. The law does not explicitly permit employers to withhold wages on account of asset recovery. Legal experts advise settling wages within 2 days and handling asset recovery separately through a structured process or indemnity clause. Withholding wages beyond the deadline creates compliance exposure.
Permissible deductions include recovery of salary advances or loans, notice pay recovery where applicable, TDS on gratuity and bonus as required, and professional tax where mandated by the state. All deductions must be itemised clearly in the settlement letter and communicated to the employee before or at the time of payment.
Yes. The new Labour Code covers all forms of separation: voluntary resignation, termination, retrenchment, dismissal, and retirement. Offrd's separation flow handles each scenario with appropriate documentation and calculation logic for each.
Start Today

Your next exit is 2 days away from a compliance issue.

Get ahead of it with Offrd. Setup takes under 2 minutes and pricing starts at ₹99.

Create Free Account Talk to the Team
No credit card required. Trusted by 3,000+ companies across India.