Resigning is easy; getting the maths of your exit right is not. "Notice period calculator" and "full and final settlement rules" are evergreen searches because every exit involves three numbers — last working day, notice buyout and F&F — and employers and employees compute them differently.
Counting the last working day
Notice starts on the day your resignation is accepted (usually the day you submit, in writing). LWD = resignation date + notice period − 1.
- 60-day notice, resigned 1 October → LWD 29 November.
- Notice is in calendar days unless the contract says "working days".
- Weekends and holidays within the notice count.
The notice period calculator handles this and the adjustments below.
Leave adjustment and buyout
- Adjusting earned leave against notice is at the employer's discretion unless the policy or contract allows it. Ask in writing; many companies allow half the notice to be adjusted.
- Buyout: you pay (or forgo) salary for the days not served. Most contracts specify basic or gross — read it. The employer deducts it from F&F; if F&F is insufficient, you pay the balance. Buyout amounts are typically not subject to GST when recovered from an employee (CBIC clarified in 2022 that notice pay is not a "service").
- Employer waives notice: if the company asks you to leave early, they owe you notice pay for the unserved days.
What goes into full & final settlement
| Component | Notes |
|---|---|
| Salary up to LWD | Pro-rated for the final month |
| Encashment of earned leave | Basic (+DA) ÷ 30 × days; policy caps apply — check your balance with the leave calculator |
| Bonus / variable pay | If policy allows pro-rata; many require you to be on rolls at payout |
| Gratuity | If eligible — see gratuity rules |
| Reimbursements | Pending claims submitted before LWD |
| − Notice buyout | If any |
| − Recoveries | Advances, unreturned assets, joining-bonus clawback |
| − TDS | On taxable components (salary, leave encashment above the exemption, gratuity above ₹20 lakh) |
Leave encashment tax: exempt up to ₹25 lakh (lifetime) for non-government employees on retirement or resignation.
When must F&F be paid?
The Code on Wages requires wages to be paid within 2 working days of removal, dismissal, retrenchment or resignation. In practice most companies process F&F in 30–45 days and issue the settlement statement with Form 16 later. If it drags beyond 45 days, send a written reminder citing Section 17(2) of the Code on Wages; the next step is the labour commissioner or a legal notice. Delays usually resolve at the reminder stage.
Documents to collect before you go
- Resignation acceptance with LWD
- Relieving letter and experience letter — the experience letter tool shows the standard format; ask HR to issue one on letterhead
- F&F statement
- Form 16 (after the financial year)
- PF: ensure your UAN is Aadhaar-linked; transfer or withdraw via the EPFO process
- Salary slips for the last 3 months (needed by the next employer)
Serving notice well
- Hand over in writing; keep copies.
- Don't stop working — misconduct during notice can void your relieving letter.
- If the new employer wants you early, ask them to fund the buyout; many do.
FAQ
Can my employer refuse to accept my resignation?
No. Resignation is a unilateral act. They can hold you to the notice period or negotiate a buyout, but cannot refuse it.
Is notice period paid?
Yes — you work, you are paid normally. Buyout applies only to days not worked.
Can the employer deduct anything from F&F?
Only lawful recoveries — advances, buyout, unreturned assets at documented value — and statutory deductions. Arbitrary "damages" are not permitted.
What if I resign during probation?
Notice during probation is usually shorter (7–30 days) as per the appointment letter. Same rules on payment apply.