An employee resigns. HR confirms the last working day. Finance calculates the final payment. Sounds straightforward.
But final settlements often involve several different pieces of information—and one incorrect input can change the outcome.
Start With the Employment Record
Before calculating anything, confirm the basics.
- When did the employee join?
- What is the confirmed last working day?
- What is the current basic salary?
- What leave remains?
- What notice applies?
- Is there any unpaid leave?
- Are there approved recoveries?
The calculation should follow the employment history, not assumptions.
End-of-Service Is Only One Part
Employers often use “EOSB” and “final settlement” as if they mean the same thing. They do not. A final settlement can potentially include several components depending on the circumstances.
For eligible foreign full-time employees under the federal private-sector framework, traditional end-of-service gratuity is generally based on 21 days of basic wage per year for the first five years and 30 days for each year thereafter, after completion of at least one year of continuous service. But that may be only one part of the final payment.
Leave Balances Need to Be Accurate
An incorrect leave balance can result in an incorrect settlement. Before separation, HR should reconcile:
- Leave entitlement
- Leave taken
- Any carry-forward
- Any unpaid leave
- Outstanding balance
Do not rely solely on a system balance if the underlying data has never been checked.
Notice Matters
The settlement may also be affected by how the notice period was handled.
- Did the employee work the full notice?
- Was notice waived?
- Was payment in lieu applicable?
- Was the employee released early by agreement?
These questions should be resolved before Finance processes payment.
HR, Payroll and PRO Need to Coordinate
The financial settlement is only one part of employee separation. The company may also need to coordinate:
- Handover
- Company assets
- System access
- Work permit or visa cancellation
- Insurance update
- Payroll removal
- Employee records
A strong exit process brings these activities together.
Have an employee leaving your business?
Invexus Advisory can support employers with separation reviews, final settlement coordination and employee exit processes.
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