India · Everyday tools
Notice Period Buyout Calculator
Calculate the buyout cost or recovery amount for serving a shorter notice period upon resignation.
Interactive calculator
Notice period buyout cost
Calculate the shortfall notice days and estimated buyout cost (including GST recovery) when exiting your job before serving full notice.
Calculation Logic:
• Shortfall Days = Notice Required (90 days) - Notice Served (30 days) = 60 days.
• Notice recovery base is standardly calculated on a 30-day month divisor.
• Notice period buyout or recovery falls under GST services and attracts an 18% tax rate in India.
Results
Net Buyout Amount
₹120,000
Base cost for unserved days
GST Recovery (18%)
₹21,600
Tax levied on notice recovery
Total Buyout Cost
₹141,600
Total cost payable to employer
How to use it
- 01Enter your monthly Gross Salary (or Basic Salary, depending on company policy).
- 02Input your total notice period requirement in days.
- 03Enter the number of days you actually plan to serve to find the shortfall.
Result guide
- Shortfall days are the unserved notice period days.
- Buyout amount is the cash payable to the company to release you early.
- Ensure to verify if your company calculates buyout on Basic or Gross salary.
About this calculator
When changing jobs in India, you are typically required to serve a notice period (often 30 to 90 days). If you want to leave early, you or your new employer must pay the old employer for the remaining notice period days.
This notice period buyout calculator helps both employees and recruiters estimate the recovery amount or early-exit buyout cost.
Frequently asked questions
Is notice buyout taxable under GST?
Yes, standard rulings indicate that notice period recovery or buyout charges collected by an employer from an employee are treated as a supply of service and attract GST (usually 18%).
Does the new employer pay for my notice buyout?
Many companies offer notice buyout reimbursement as an onboarding incentive. If they do, they will pay the amount, but it is typically treated as a taxable benefit in your hands and requires proving payment receipts.
How is notice period payout calculated?
The standard formula is: (Gross Monthly Salary / 30) * number of unserved days. Some organizations use Basic Salary instead of Gross, depending on the employment contract.
Method and limitations
This calculator uses the formula and assumptions described on this page. We do not claim independent professional review. Direct references will be listed here when they support a specific rule or data source used by this calculator.
Results are estimates for general information. Verify current rules and assumptions before making financial, tax, or health decisions.
Read our Editorial and Verification Policy →Related calculators
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