Hi Woody,
In my Indian Project client do this functionality regularly by F&F Action Type (Full & Final Settlement). They wont run the payroll for the last month and hold the salary for any deductions (Oth. deduction, loan deductions, TDS and Statutory) and remaining amount will given to the employee. if deductions are more than the earned salary it will adjusted from his Statutory or recover by cash directly.
If the payroll area is in exit mode then they will give the amount through IT 0015 in the next month and do FI postings too. F&F Action type (is same as Employee Exit Action type with Delimitation of IT's)