Notice Period Cost Calculator
Exact buyout cost, optimal resignation date, net gain after switching. Private, instant.
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How Notice Period Buyout is Calculated in India
When you resign before serving your full notice period, your employer can require you to pay a buyout amount equivalent to the salary for the remaining notice days. This amount can be significant — for a 3-month notice period at ₹15 LPA, the potential buyout is ₹3.75 lakh.
The calculation varies by company policy. Some calculate buyout on basic salary only — typically 40–50% of your CTC — which is cheaper for you. Others calculate on gross salary — your full monthly take-home equivalent — which is significantly more expensive. The policy should be stated in your appointment letter; if it isn't, HR will default to their standard practice.
The per-day rate is calculated as monthly salary ÷ 26 working days (not 30 calendar days). So if your monthly gross is ₹1,00,000 and you need to buy out 45 days: ₹1,00,000 ÷ 26 × 45 = ₹1,73,077. Many new employers — especially in IT and consulting — offer a joining bonus specifically to cover this cost. Always negotiate notice buyout coverage as part of your offer negotiation.
Your notice period runs from the day your resignation is accepted, whatever the day of the month, so the timing that matters is what you would forfeit by leaving early: a bonus, an ESOP tranche or gratuity. The Resignation Date Optimiser works that out.
Worked Example: Buying Out 60 Days
Say your monthly basic is ₹50,000, your monthly gross is ₹1,00,000, your notice period is 90 days and you have served 30 of them. Your new employer wants you in a month, so you need to buy out the remaining 60 days. Depending on your company's policy, the bill can be very different:
| Policy basis | Daily rate | Cost of 60 days |
|---|---|---|
| Basic, calendar days (÷ 30) | ₹1,667 | ₹1,00,000 |
| Gross, calendar days (÷ 30) | ₹3,333 | ₹2,00,000 |
| Gross, working days (÷ 26) | ₹3,846 | ₹2,30,769 |
The same 60 days can cost anywhere from ₹1 lakh to ₹2.3 lakh. That is why the first thing to find out, before you resign, is which basis your appointment letter or HR policy uses. Most employers recover the amount from your full and final settlement (pending salary and leave encashment) and ask you to pay only the shortfall.
How to Pay Less, or Nothing
- Offset with leave. Some companies let your earned-leave balance cover part of the notice period; others don't allow leave during notice. Ask HR in writing.
- Ask for an early release. If your handover is complete, managers often agree to a shorter notice or waive part of the recovery. It costs nothing to ask.
- Get the new employer to pay. Notice buyout reimbursement, usually as a joining bonus, is common in IT and consulting. Get it in the offer letter, and check the clawback terms (often repayable if you leave within 12 months).
- Negotiate the basis. If the policy is silent, ask for the buyout to be calculated on basic rather than gross pay.
For the full background, read our notice period buyout guide.