Full & final settlement is the reconciliation on exit: pending salary, leave encashment, bonus/variable due, gratuity (if 5+ years), reimbursements, minus recoveries (notice-period shortfall, advances, asset dues). Alongside it, the employee should get their Form 16, experience/relieving letter, and PF transfer/withdrawal support. Handled cleanly, it protects goodwill (and alumni advocacy); handled badly, it's a lasting sour note.
In India
Typically expected within 30–45 days of the last working day. Delays and disputes over notice-period recovery are a frequent exit friction point.
In practice
An employee resigns; F&F computes ₹80k pending salary + ₹45k leave encashment + ₹2.4 L gratuity − ₹30k notice shortfall = ₹3.35 L payable, settled with Form 16 and relieving letter within 40 days.