Notice period buyout

If you leave before serving your full notice, the employer usually recovers the shortfall. Whether that is computed on Basic or on gross is a contractual question worth checking before you resign.

Notice period buyout

Per-day Basic × days short-served. Can be paid by employee or recovered from F&F.

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How it is calculated

1

Work out the shortfall — notice required minus notice actually served.

2

Identify the salary basis in your contract: Basic, gross, or full CTC.

3

Compute a daily rate and multiply by the shortfall in days.

Worked example

A 90-day notice with 30 days served leaves a 60-day shortfall. On a gross of ₹60,000 a month, that is roughly ₹1,20,000 recoverable.

What to watch for

Frequently asked questions

Can an employer force me to serve notice?

They can enforce the contractual consequence — usually recovery of pay — but specific performance of a personal service contract is not ordinarily granted.

Is the buyout tax deductible for me?

Recovery from your salary reduces what you receive, but its treatment for tax has been litigated. Take advice for your circumstances.

More Leave & Time calculators

There is an easier way to do this each month.

Garuda HR looks after payroll, attendance, leave and statutory compliance for Indian teams — the same arithmetic, run for you every month, with a full audit trail. We would be glad to show you around.