When an employee leaves before serving the full notice period, either the employee buys out the shortfall (paying salary for unserved days) or the employer recovers it from the final settlement. This calculator works in both directions — for an employee planning a resignation, or for HR/payroll computing the recovery — and supports leave adjustment, basic-only or full-gross modes, and produces a clean letter PDF you can use as a buyout request or recovery notice.
Tip: Check your offer letter or HR policy to confirm whether buyout is calculated on basic + DA only or on full gross salary. The default below uses basic + DA, which is more common.
Details
Buyout Amount
Frequently Asked Questions
What is notice period buyout?
Buyout is when an employee pays the employer to skip part or all of the notice period. The amount typically equals salary for the unserved days, calculated using basic + DA or full gross.
How is buyout calculated?
Standard formula: (Monthly salary ÷ 30) × unserved days. Some companies use full gross, others use only basic + DA — check your offer letter.
Can the employer refuse buyout?
Yes. Buyout is a privilege, not a right. The contract decides whether buyout is allowed. If denied, you must serve the full notice or risk being marked as absconding.
Is notice pay taxable?
If you pay buyout: personal expense, not deductible. If the employer pays you in lieu of notice: taxable as salary at your slab rate.
Can I use leave balance to reduce buyout?
Many companies allow earned leave to be adjusted against the unserved notice period. Some don't. This calculator lets you enter your leave balance to see the net impact either way.
Does the new employer pay my buyout?
Some companies offer "buyout reimbursement" as a sign-on perk for senior hires. Ask your offer-letter recruiter — it's often negotiable for in-demand roles.