Estimate buyout as gross monthly pay prorated by the number of days in a chosen calendar month. Your contract may define a different method.
How SalaryExit calculates estimates (methodology, FY scope, and limits).
This is a gross estimate — taxes and recoveries are not applied (see accuracy card).
Engine snapshot: ₹90,000/month gross, 45 notice days, month 3/2025 (31 days). Daily rate ₹2,903.23 → buyout ₹1,30,645 gross.
This model divides by the calendar days in that month. February vs March changes the daily rate.
When an employee in India leaves a job without serving the full contractual notice period, the shortfall is typically offset by a “notice period buyout” or “notice pay” — a deduction from the final settlement equal to the salary that would have been earned during the unserved notice days. Similarly, if the employer asks the employee to leave without serving notice, the employer pays the employee an equivalent amount as notice pay in lieu.
The question of what “salary” means in this context is where variation enters. Most employment agreements define notice pay as the basic monthly salary, or the “gross monthly salary” as defined in the contract. Some contracts specify CTC/12. Variable pay, bonuses, and allowances are typically excluded from notice pay calculations — but this depends entirely on your employment agreement wording. Reading your appointment letter carefully before negotiating a short exit is essential.
The calculation itself is usually straightforward: if your contractual notice period is 90 days and you served 30, the buyout covers 60 days. Most contracts calculate this as gross monthly salary × (shortfall days ÷ days in the month), using actual calendar days in the relevant month, not working days. Some employers use a standard 30-day denominator regardless of the calendar month. This calculator uses a configurable per-day rate so you can try both methods.
Notice period waivers are common in practice. If your employer agrees to waive the notice period without charging you, no buyout is deducted. This often happens when a new employer is paying the buyout on your behalf, or when the employer has a pressing need to free up your role. The buyout arrangement, if charged, is typically not a tax-deductible expense for the employee — check with a CA if the amounts are significant.