Time line for Settlement

Hi Community-

Need to know- Is there any specific time line for settlement to be paid to an employee?

Please advise.




Some information I find on this is -at present, since there is no clarity regarding the time line for settlement of full and final payments, companies have their own policies. "Under the current Payment of Wages Act, 1936, there is no specific time limit for making full and final settlement payment on resignation of an employee.

The current Act covers only the specified nature of termination of employees whose earning wages does not exceed rs 24,000 per month. This wage amount is revised by the government on the basis of Consumer Expenditure Survey.

Let hear from other fellow members as well if they have more to share.



Hi @Jeevan

Agree with your point!

To add up on this Code on Wages 2019 has been already proposed and approved by President for the same.

But yet to come into force! If it comes there will be a major change in the settlement due dates - example: an employee would be able to get settlement in 02 days also.

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Hi Ann,

I agree with the above points. There is no such time limit under Wage code. Settlement time limit companies can decide. At present if we see generally companies takes 30 to 45 days for settlement.

Hope this information will be helpful for you.


Dear @Anushree,

Though there is no clarity about the time line for settlement, salary of the last month or whatever number of the working days employee was present, needs to be paid by 7th day of the next month. This is because for whatever days employee was present, employer needs to submit his PF to EPFO.

Another thing is, if employee is eligible for Gratuity, then Gratuity needs to be paid within 30 days of his last day with company.




As per the Payment of Wages, FnF Settlement do be done by the expiry of Second working day from the day which employee was effectively terminated.