A man resigns on the fifteenth

"Imran has resigned. His last day is the fifteenth. Get his clearance done and pay him his final settlement, with his gratuity and his leave encashment."

What is really being asked

One number: what Imran is owed on his last day. Getting to it means three screens, and the useful thing to know before you start is that most of it fills itself and a few things do not. The few that do not are where the money goes wrong.

The other thing to know first: the resignation document is paperwork. The dates the rest of the system actually reads are on Employee Basic Information.

What you need in place first

• Gratuity Policy - the rate and the minimum service, named on his Employee Policy Profile.
• Recurring Payments and Deductions - his current salary, because the whole settlement is derived from his gross.
• Employee Leave Entitlement - his leave balance, if leave is being encashed. See a man wants his leave balance paid out.
• Employee Payroll Loan - any loan still running, because the balance is recovered from the settlement.
• Training Bond - if he is inside a bond period.
• Wage Type - every settlement component must have one.

Do this

1. Record the resignation. Open Resignation. Employee, resignation date, last working day, reason.

   Be clear about what this screen is: a record. It validates nothing, the reason is free text, and it writes nothing to any other screen. It will not stop a last working day before the joining date, and it will not fill the employee record for you. It is for the file and the approval trail. That is all.

2. Put the dates on the employee record. This is the step that matters. Open Employee Basic Information and fill the resignation and termination dates there. Every other screen - the settlement, the gratuity, the reports, the headcount - reads these dates, not the resignation document's.

   Skipping this is the most common fault on this page. The resignation is approved, everybody moves on, and the man is still live in every report and still on the next payroll.

3. Do the clearance. Open Employee Clearance. Add a line per department that has to sign off - stores for the tools, IT for the laptop, finance for the advance, admin for the gate pass - each with the department, the responsible person and any pending amount the department is holding him to.

   What fills itself: the header's total pending amount adds up the lines, the header's cleared mark comes on only when every single line is marked cleared, and the clearance date fills from the lines. Do not type the total, and do not try to close the header while a line is open. The screen will not let you, and that refusal is the entire point of the screen.

4. Create the final settlement. Open Final Settlement, name the employee and the last working day, and let it price.

   What it fills for you, none of which you should type:

   • Service (Years), from his joining date to his last working day.
   • Salary to Last Working Day - a daily rate times the days worked. The daily rate is his gross divided by 30, every month, whatever the length of the month. Say that out loud to the client before he finds it, because a 15 February leaver and a 15 March leaver are paid the same.
   • Gratuity, from the gratuity policy on his policy profile.
   • Leave encashment, from his open balance, with the minimum-keep rule waived because he is leaving.
   • Loan recovery, the sum of every installment still uncleared. A skipped installment comes back here in full. See a loan installment must skip one month.
   • Clearance deductions, which arrive as a single line under "Other" for the total the clearance held him to.
   • The three totals: payable, deduction and net.

   What you type, because nothing feeds it:

   • Notice Period (Days) and Notice Shortfall (Days). Nothing computes these. Not the notice period on his position, not the gap between the resignation date and the last working day. Work the shortfall out from his letter, type it, and then add the recovery as a component line by hand.
   • Any component the client has agreed that the system does not know about - a goodwill payment, a retained bonus, a vehicle buy-back.

5. Re-price only if you must, and know what re-pricing does. The pricing runs once and leaves alone any line you have touched by hand. That is a feature: your typed notice recovery survives a re-price. It is also a trap: a line you corrected does not refresh when the figure under it changes. If you change his salary and then re-price, delete your hand-edited lines first.

   If the screen comes back with "Nothing was found to settle for this employee - check the recurring salary, clearance, bond and loan documents, or add a component line by hand", it means what it says. He has no salary on record, so there is nothing to price from. Fix the salary. Do not type the settlement.

6. Check the gratuity yourself. Every time. This is the honest warning on this page. Gratuity Policy carries four Eligible-on ticks, one per separation type - resignation, termination, retirement, death. They are read by nothing. Gratuity is paid on every separation that clears the minimum service, whichever tick is on or off.

   So a client whose policy is "gratuity on retirement, nothing on resignation" cannot have that today, and no amount of configuration will give it to him. The only control is you: look at the gratuity line on every settlement and delete it when the client's policy says it is not due. Put that in the client's written procedure, not in a conversation.

7. Get the settlement approved and paid through the client's normal route, then confirm he does not appear on the next Payroll run.

Where two clients differ

	Factory worker, resigns	Office manager, resigns
Notice in his letter	One month, served in full	Two months, one served
Notice shortfall	Nil	Typed by hand, recovered by a line you add
Gratuity	Due, over the minimum service	Due by the system, but the client's policy says not on resignation - delete the line
Leave encashment	Balance, minimum keep waived	The same
Clearance lines	Stores, gate pass, uniform	IT, handover, company car, credit card
Loan	Usually one, recovered in full	Often none

How you prove it worked

1. Check Service (Years) against his joining date on paper. A wrong figure here means a wrong gratuity, and gratuity is usually the largest line.
2. Check Salary to Last Working Day. The quantity must be 15 for a leaver on the fifteenth, and the rate must be his gross divided by 30. Work both out before you look.
3. Add the component lines up yourself and compare with the three totals. They are computed, so a mismatch means a line was added after the totals were read. Re-price.
4. Compare the loan recovery against the loan document's outstanding balance. These two must agree to the rupee.
5. Compare the deduction total against the clearance's pending total. They must agree, and if the clearance changed after the settlement was priced, the settlement does not know.
6. Look at the gratuity line and decide, deliberately, whether the client's policy says it is due. Do not assume the system decided.
7. Run the next Payroll unposted and confirm he is not in it.

What will go wrong

• The resignation is recorded and the employee record is not updated. He stays live, stays on the payroll and stays in the headcount.
• The notice shortfall is expected to compute. It does not. It is typed, and if nobody types it the company quietly gives away a month's salary.
• Gratuity is paid on a resignation the client never intended to pay on, because the Eligible-on tick looked as though it were doing something. Check the line by hand, every settlement.
• The clearance is closed by typing the header instead of clearing each line, so a department's pending amount never reaches the settlement.
• The settlement is priced before the clearance is finished. The deduction is missing, the man is overpaid, and the money has left the building. Clearance first, settlement second, always.
• A hand-corrected line is expected to refresh on a re-price. It will not. Delete it and let the pricing redo it, or keep it and accept your own figure.