Notice Period Cost Calculator

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.

The optimal resignation date is typically the 1st–3rd of a month, so the days already worked in the current month count towards your notice period and reduce your buyout.