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When can settlements be done in a month?

Settlements can be done at any time during the month. If an employee is leaving on 5th of a month, the company can do the settlement on 5th itself. Some companies have a rule of calculating the settlement during the regular payroll process. Some companies may do settlements till 15th outside the payroll. All settlements after 15th may be done along with the payroll.

No method is sacrosanct (correct) and companies follow the method that suits them best.

What is Final Settlement in Payroll?

In payroll processing, an employee leaving the company has to get paid for the last working days/month(s). This procedure of paying or recovering during the resignation process is known as Final Settlement. Final settlement can be done on the last working payroll month or subsequent months. The employee can be settled first and then resigned or you can resign an employee and then do the final settlement at a later date.

How does an employee's name get added in the Final Settlement module?

When the employee is marked as Resigned or Left Organization, the employee's name will automatically display in the list of employees who need to be settled. 

Is it possible to do final settlement without resigning the employee?

Yes! You can mark an employee as Settled without resigning the employee.

Is it possible to do final settlement more than once for an employee?

Yes, final settlement can be done more than once for an employee. This process is called Resettlement.

Is the Leaving Date in Final Settlement module different from leaving date in the Resignation module?

No, both the dates are same. If the leaving date is changed in one module, the date changes automatically in the other module as well.

What will happen to loan balance of the employees when you settle them?

Entire loan balance will be deducted automatically during the final settlement process. This amount will appear under the specific loan component of Deductions.

Will the Income Tax module project the tax for the settled employees?

No! Since the employee is leaving, tax is not projected for that person during the final settlement process.

What is Notice Period Payable?

The difference between notice period and number of days worked in the last payroll is called Notice Period Payable. This is applicable to companies that have a defined notice period for resigned employees.

What are Leave Encash days?

The number of leave days that can be encashed are called Leave Encash days. If the employee has a leave balance then encashment of leave is possible.

Will the Final Settlement module compute the salary based on the number of days in a month of leaving date?

Yes! By default, the payroll software is configured to calculate the salary based on the number of days in the month of leaving.
For example, if a person has resigned in the month of April and you are processing the final settlement in the month of May then the salary will be calculated on a base of 30 days.

Why is the leaving date of the employee mandatory while settling the employee?

Based on the leaving date, the payroll software will calculate the number of working days, unclaimed balance of Reimbursement components, and reimbursement balance.

How do I generate the Final Settlement report?

You can download the final settlement report by clicking the Download [] button adjacent to the employee name.

When we go to final settlement module and try to calculate the number of days worked, the computed value seems to be wrong. For example, if I enter 31 days in the month of August and 12 days in the month of September then the total number of days worked should be 43 days. Instead it is showing 42.8 days.

The payroll software prorates the days worked on the basis of total number of days in the month (30/31 days). This can lead to fractional values as mentioned above.

Assume an employee has worked 31 days in August and 12 days in September. In Greytip Online, we will be dividing this by number of days, which is either 30 or 31. The decimal is to adjust this. So it is normal for the decimal to appear.

If you are doing final settlement in September and paying for August also then the number should be less than 43. This is because if you are doing final settlement in September then the division factor is 30; therefore, the number should be less than 43.

If you are doing the final settlement in August itself but paying for additional days in September in the settlement that you are doing in August then you will need to manually put the correct working days value.

How to process the full and final settlement for an employee?

After an employee resigns, the Admin has to update their details in the Separation page. To process the full and final settlement for an employee, you have to perform the steps in the following order:

  1. Updating resignation details for an employee.
  2. Processing full and final settlement for the employee.

Updating resignation details for an employee

Perform the following actions to update the resignation details for an employee:

    1. Navigate to Employee > Information > Separation

      To directly perform this action, go to the Actions > Employee Separation.
    2. In the Separation page, search for the employee whose resignation details you want to update.
    3. In the Separation Mode field, select the mode of separation from the drop-down list.
    4. Click to edit the employee details under the following sections:
      • Resignation Details—update details like resignation submission date, reason for leaving, notice period and so on.
      • Exit Interview—update details like interview date and notes.
      • Exit Details—update details like leaving date, settled on and so on.
    5. Click Save. A message appears stating the records are successfully updated.

Processing full and final settlement for the employee

Perform the following actions to to process the full and final settlement for an employee:

  1. Navigate to Payroll > Payroll Inputs > Final Settlement.
  2. In the Final Settlement page, click Settle Employee. The Settlement page appears.
  3. In the Employee section, select the option Search Employee. Then search for the employee, for whom you want to process the resignation details.
  4. Click Next. The Resignation Details section appears.
  5. Select the resignation submitted on, leaving date, reason for leaving and settlement date.
  6. Click Next. The Notice Pay section appears.
    1. Select the checkbox appearing against Notice Period.
    2. Update the notice period days, short fall days and number of days served.
  7. Click Next. The Work Days section appears.
  8. Type the number of days worked by the employee.
  9. Click Next. The Leave Encashment section appears.
  10. Type the number of leaves that can be encashed.
  11. Click Next. The Remarks section appears.
  12. Type remarks, if any.
  13. Click Finish. The employee details are displayed with options to generate letter, view salary info, view settlement and close.

How to hold the salary for an employee?

To hold salary for an employee, perform the following steps:

  1. Click Payroll and then click the Advance link appearing at the bottom of the left menu.

  2. Navigate to Payout > Hold Salary Payout and then click .  The Hold Salary Payout – <Payroll month> page appears with options to select an employee and continue with the process of holding the salary payment.

    You can also navigate to the page through Actions > Hold Salary Payout.
  3. Search for the employee, whose salary you want to hold.
  4. In the Hold Reason field, choose the appropriate reason from the drop-down menu.
  5. In the Remarks text box, type an appropriate note for holding the salary payment.
  6. Click . A pop-up appears prompting you to confirm your action.
  7. Click . A message displays stating salary payout is put on hold for that employee, for the selected month. This employee then appears on the Hold Salary Payout - <Payroll month> page with details about the held salary payment.

Salary is automatically released during the final settlement.

How to get the Payslip for the salary that is kept of hold?

Only Admin can access the Payslip of employees that are kept on hold. To get those payslips, perform the following steps:

  1. Navigate to Payroll > Payout > Payslips. The Payslips page appears.
  2. Under the Settlement Payslip tab, select the Selected employees option .
  3. Select the employee from the list.
  4. You can either download the PDF version of the Payslip or send them as email to the employees. As per the need, click one of the following buttons:
    • Download as PDF—downloads the payslip in PDF format.
    • Send E-mail—sends the payslip to the employee over email. A pop-up appears prompting you to confirm your action. Click Confirm to proceed. A message appears stating that the payslip is generated.

Can we release the full and final settlement payslip for employees who have resigned?

No. After an employee separates from the organization and the details are updated, the employee can no longer access the greytHR Employee Portal (as the portal is deactivated). Hence, the payslip for the resigned employee cannot be released.

How to process leave encashment for settled employees?

To process leave encashment for a settled employee, perform the following actions:

  1. Navigate to Payroll > Payroll Inputs > Final Settlement. The Final Settlement page appears.
  2. Click Settle Employee. The Settlement page appears.
  3. In the Employee section, you can either choose from the list of separated employees or search for the employee, for whom you want to process the resignation details.
  4. Click Next. The the Resignation Details section appears.
    1. Select the date of resignation submission, leaving date, reason for leaving and settlement date.
  5. Click Next. The Notice Pay section appears.
    1. Select the checkbox appearing against Notice Required.
    2. Update the notice period days, short fall days and number of days served.
  6. Click Next. The Work Days section appears.
    1. Type the number of days worked by the employee.
  7. Click Next. The Leave Encashment section appears.
    1. For each Leave Type displayed, type the number of leaves that must be encashed.
  8. Click Next. The Remarks section appears.
    1. Type remarks, if any.
    2. Click Finish. The Settlement page appears displaying the leave encashment details.

How to calculate the pay for notice period?

While processing the full and final settlement for the resigned employee, select the check box appearing against Notice Period in the Notice Period section. To know more about this option, click here. The notice period days are automatically displayed in their respective fields. Accordingly, you can calculate the pay for the notice period.

While updating the resignation details of an employee, update the notice period days in the Separation page.

How to process the full and final settlement in bulk?

To process full and final settlement in bulk, perform the following steps:

  1. Navigate to Employee > Admin > Excel Import. The Excel Importer page appears.
  2. In the Importer Type drop down, choose Employee Resignation from the list.

    You can also download a sample excel file and reuse it, if required.

  3. Click to upload the particular Excel file containing bulk full and final settlement data of employees.
  4. Click Next.
  5. For the fields appearing under the Fields From Excel column, select the corresponding field under the Mapped To column.
  6. Click Next. The Excel Importer Validate section appears displaying the message, No new master found. Please click next to see the import result.  This message implies that imported values map to system-defined values.
  7. Click Next. The Excel Importer page appears displaying a log of the actions performed.

How to update the variable components in full and final settlement?

To update the variable components in full and final settlement, perform the following actions:

  1. Navigate to Payroll > Payroll Inputs > Salary. The Salary page appears.
  2. Type and search for the name of an employee, whose variable components you want to update.
  3. Expand the Gross component and click the Edit icon () appearing adjacent to Incentives. The Edit: INCENTIVE dialog box appears.
  4. Click Add. A row appears with various editable and non-editable fields.
  5. In the Amount field, type the values you want to update.
  6. In the Remarks filed, type remarks, if any.
  7. Click Save. A message appears stating that your details are saved successfully.
  8. Click Close.
  9. Click for the changes to reflect.

You can follow the same process to update various other variable components.

Why am I unable to process the payroll for an employee once the resignation details are updated?

You must process the full and final settlement only after updating the separation details of the employee. Only after this, salary gets processed.

Why are the settled employees appearing on the “Quick Salary Statement”?

If salary for the settled employees was processed before updating their resignation details, then the name of all those settled employees appear in “Quick Salary Statement”. To clear their names from the Quick Salary Statement, perform the following actions:

  1. In the Actions tab, search by typing the keyword clean.
  2. Click the Clean Up Payroll link that appears. The Clean Up Payroll page appears.
  3. In the Exceptions filter, select Resigned Employee. A list appears displaying the resigned employees.
  4. Select the check box against the employee for whom you want to clear the payroll.
  5. Click Clean Up.

How to pay unclaimed reimbursement while processing the full and final settlement?

If reimbursement configuration is done at the time of implementation, the unclaimed reimbursement appears automatically while processing the full and final settlement.

How to delete the full and final settlement?

To delete the full and final settlement of the employee, perform the following steps:

  1. Navigate to Payroll > Payroll Inputs > Final Settlement. The Final Settlement page appears.
  2. Select the employee from the list and click . A dialog box appears prompting you to confirm your action.
  3. Click Confirm. A message appears stating record deleted successfully.

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