Offboarding & Full-and-Final Settlement

Once a resignation is approved and the employee is serving their notice period, the offboarding process begins. Udyamo HRMS provides a structured offboarding workflow — from asset collection and knowledge transfer through to the full-and-final (F&F) settlement that closes out the employee's financial relationship with the organization.

This chapter covers the offboarding checklist, the full-and-final calculation, and the steps to formally complete an employee's exit.

What You Will Learn

• How to use the employee lifecycle dashboard for offboarding
• How to manage the offboarding checklist (ResignationChecklist)
• The components of a full-and-final settlement
• How gratuity is calculated for eligible employees
• How to generate the F&F statement
• How to complete the exit process and update employee status

Prerequisites

Required: The employee must have an Approved resignation with a confirmed last working day. See Chapter 39: Resignations & Notice Period for the resignation workflow.

Required: You must have an Administrator or HR Manager role to manage offboarding and process full-and-final settlements.

Employee Lifecycle Dashboard

Udyamo HRMS provides a lifecycle dashboard that gives HR teams a consolidated view of employees at every stage of the employment lifecycle — from onboarding through active employment to offboarding.

Navigating to the Lifecycle Dashboard

1. Click Employees in the left sidebar.
2. Click Lifecycle (or Employee Lifecycle).
3. The dashboard displays employees grouped by their current stage.

The offboarding section of the dashboard shows:

Tip: Use the lifecycle dashboard as your daily working view during an employee's notice period. It consolidates everything you need to track in one place.

Offboarding Checklist

The offboarding checklist (managed via the ResignationChecklist model) ensures that all necessary exit tasks are completed before an employee's departure. Each checklist item has an assignee and a completion status.

Default Checklist Items

Udyamo HRMS provides a set of default offboarding checklist items. Organizations can customize this list.

Viewing the Offboarding Checklist

1. Navigate to Employees > Resignations.
2. Click on the approved resignation for the departing employee.
3. Click the Offboarding Checklist tab (or scroll to the checklist section).
4. The checklist displays all items with their current status.

Marking Checklist Items as Complete

1. Open the offboarding checklist for the employee.
2. Locate the task to update.
3. Click the checkbox or Mark Complete button next to the item.
4. Optionally add a note (e.g., "Laptop serial no. ABC123 returned on 2025-07-10").
5. The item status changes to Completed and the completion date is recorded.

Tip: Assign checklist items to specific people or departments so that responsibility is clear. The assigned person receives a notification reminder as the last working day approaches.

Adding Custom Checklist Items

If your organization requires additional offboarding steps:

1. Navigate to the employee's offboarding checklist.
2. Click Add Item.
3. Enter the Item Name, Category, and Assignee.
4. Click Save.

The new item appears in the checklist and must be completed before the exit can be finalized.

Tracking Checklist Progress

The checklist progress is displayed as a percentage on the lifecycle dashboard and the resignation detail page.

Warning: The system will warn you if you attempt to complete the resignation before all checklist items are marked as done. While you can override this warning, it is strongly recommended to complete all items first.

Full-and-Final Settlement (F&F)

The full-and-final settlement is the financial closure of an employee's tenure with the organization. It accounts for all earnings owed to the employee and all recoveries due to the organization.

F&F Components

The full-and-final statement includes the following components:

Amounts Payable to Employee

Amounts Recoverable from Employee

Net F&F Amount

Net F&F = Total Payable to Employee - Total Recoverable from Employee

If the net amount is positive, the organization pays the employee. If negative, the employee owes the organization (typically recovered from any pending payments or settled separately).

Gratuity Calculation

Gratuity is a statutory benefit under the Payment of Gratuity Act, 1972. It applies to employees who have completed five or more years of continuous service.

Eligibility

Gratuity Formula

Gratuity = (Last drawn basic salary + Dearness Allowance) x 15 x (Years of service) / 26

Where:

• Last drawn basic salary + DA = The employee's basic pay plus dearness allowance as of the last working day
• 15 = 15 days of wages for each completed year of service
• Years of service = Total completed years (fractions above 6 months are rounded up)
• 26 = Number of working days in a month (as per the Act)

Gratuity Calculation Example

Tip: Udyamo HRMS automatically calculates gratuity based on the employee's salary components and service tenure when you initiate the F&F settlement. The system uses the basic salary and DA components from the employee's salary structure.

Warning: The maximum gratuity payable under the Act is INR 20,00,000 (twenty lakh rupees). Amounts exceeding this cap are subject to the employer's discretion and tax implications.

Generating the F&F Statement

Step-by-Step: Initiate Full-and-Final Settlement

1. Navigate to Employees > Resignations.

2. Click on the employee whose resignation is Approved and whose last working day has arrived (or is approaching).

3. Click Initiate F&F Settlement (or navigate to the Full & Final tab).

4. The system auto-populates the settlement components:

   • Pending salary (calculated from the last payrun date to the last working day)
   • Leave encashment (from the employee's current leave balances)
   • Gratuity (if eligible, based on the formula above)
   • Outstanding loans and advances (from the loan and advance modules)
   • Pending reimbursements (from approved but unpaid claims)
   • Notice period adjustment (if applicable)

5. Review each line item. You can manually adjust amounts if needed (e.g., for discretionary items).

6. Click Calculate to see the net F&F amount.

Step-by-Step: Finalize and Generate the Statement

1. After reviewing the calculation, click Finalize F&F.
2. The system generates a Full-and-Final Statement document.
3. The statement includes:
   • Employee details (name, ID, department, date of joining, last working day)
   • Itemized earnings and deductions
   • Net payable or recoverable amount
   • Tax implications
4. Click Download PDF to save the statement.
5. Share the statement with the employee for acknowledgment.

Tip: Keep a signed copy of the F&F statement in the employee's document record for compliance and audit purposes.

Completing the Exit Process

Once the offboarding checklist is 100% complete and the F&F settlement is finalized, you can formally complete the exit.

Step-by-Step: Complete Employee Exit

1. Navigate to Employees > Resignations.
2. Click on the employee's approved resignation.
3. Verify:
   • All offboarding checklist items are marked complete.
   • The F&F settlement has been finalized.
   • The last working day has passed.
4. Click Complete Exit (or Mark as Completed).
5. Confirm the action in the dialog.

What Happens When You Complete the Exit

Warning: Completing the exit is a significant action. Ensure the F&F payment has been processed (or at least approved) before completing the exit, as the employee will lose system access.

Experience Letter and Relieving Letter

As part of the offboarding process, HR should issue the departing employee their experience letter and relieving letter.

Generating Letters

1. Navigate to the employee's profile.
2. Click Documents or Letters.
3. Select Generate Experience Letter or Generate Relieving Letter.
4. The system uses the configured HR template (see Chapter 41: Documents & HR Templates) to populate the letter with employee details.
5. Review and edit the generated letter if needed.
6. Click Download or Send to Employee.

Tip: Configure experience letter and relieving letter templates in advance under Settings > HR Templates so they are ready when needed. See Chapter 41 for template management.

Offboarding Timeline — Summary

Common Errors and Solutions

Best Practices

1. Start offboarding early. Begin checklist tasks on the day the resignation is approved, not on the last working day.
2. Assign clear owners for each checklist item. Ambiguity leads to missed tasks.
3. Run the F&F calculation a week before the last working day. This gives time to verify amounts and resolve discrepancies.
4. Conduct the exit interview before the last day. Feedback is more candid when the employee still has a few days left.
5. Archive documents. Upload the signed F&F statement, experience letter, and relieving letter to the employee's document record for future reference.

What Comes Next

With resignations and offboarding covered, the next chapter addresses document management and HR templates that support the entire employee lifecycle. Proceed to Chapter 41: Documents & HR Templates.