How to process a Full and Final (F&F) Settlement

When an employee moves out of the organization or is terminated, the organization has to settle their payments and deductions. Full and Final Settlement (F&F) is critical in ensuring that the dues you have is processed without errors.

Let’s see how to process a typical F&F settlement on the Keka portal.

Go to the Org (1) menu and click Exits (2). Choose In exit process (3). Use the search field to search for (4) the employee and click on the 3 dots (5) against their name. From the options that pop up, choose Process and Settle (5).

On the next page, under Exit Notice (1), you can choose to Extend (2) the notice period, if it is applicable. Otherwise, select None. 

If the exit information needs to be changed, click on the edit (3) icon against the Exit Details. Then, click Save & Continue (4).

On the next page, under Pending Activities (1), you can add/edit the pending tasks (2) of the exiting employee. 

You can also look into other necessities like transitioning of reporting employees, recovery of assets (2), etc. Once done, click Save & continue (3). 

Under Payables, on the next page, you can make required changes in the fields like Gratuity, LOP Reversals, Bonuses Due, Overtime, Shift Allowances, etc. Note that all these are subject to the organization’s salary structure settings.

Under the Payables tab itself, you can edit the Leave Encashment settings for the exiting employee by choosing the Encashment policy or by overriding the system-generated calculation. 

Using the drop-down under Pay Action, you can also choose to pay or void the amount.

You can add any One-time Payment amount that you want to pay to the employee at the time of settlement as an adhoc payment type. 

Also, you can select to pay or deduct any other settlement amount under the F&F settlement. Once done, click Next.

On the Dues & Overrides window, you can make changes, if required, in the fields highlighted below. Here, you can configure the Notice Period Buyout settings. You can also look into LOP Overrides, if any. Under Loans, you can check for any pending loan amounts in the settlement month.

Under Contribution Override, you can override the statutory contribution amounts (ESI and LWF). Here, you can also override tax amounts (PT and Income Tax).

Under One-time Deductions, you can deduct any amount the employee owes to the company from their total payable salary as Ad hoc deductions. 

After finishing the changes, click Next.

Under Finalize (1), you can choose between a One-time Complete Settlement and a Periodic Partial Settlement. If you want to, you can download the entire summary of the calculation by clicking on Download F&F Statement (2). 

Here, you can decide on what you want to do with the settlement amount: Pay, Void or mark it as Already Paid (3). 

If you choose to pay, select the Settlement Month (4) and then click Finalise and Settle (5).

On the overlay window, click Confirm.

If you have more queries, please check out the FAQ articles or contact our product experts.