How to Use the Notice Period Buyout Calculator
- Enter your current CTC - Your monthly cost-to-company at current job
- Set your notice period - Standard is 30, 60, or 90 days in India
- Days you'll serve - How many days of notice you plan to complete
- New job details - Enter salary hike percentage and any joining bonus
- Counter offer (optional) - If your current company made a counter offer
- Review the analysis - See if buyout is financially worth it
Understanding Notice Period Buyout
Notice period buyout is when you pay your current employer to leave before completing your full notice period. The calculation is straightforward:
Buyout Amount = (Notice Period Days - Days Served) x (Monthly CTC / 30)
When is Buyout Worth It?
- Your new salary is significantly higher (30%+ hike)
- New employer offers signing bonus covering buyout
- There's an urgent project or opportunity at new company
- Current company has already replaced you or doesn't need handover
When to Serve Full Notice
- Salary hike is marginal (less than 20%)
- No signing bonus or buyout reimbursement
- Good relationship with current employer you want to maintain
- Important pending bonuses or RSU vesting
Frequently Asked Questions
How is notice period buyout calculated in India?
Notice period buyout = (Days to buyout) x (Daily Salary). Daily salary is typically calculated as Monthly CTC divided by 30. For example, if your monthly CTC is Rs 1 lakh and you need to buyout 60 days, the amount is approximately Rs 2 lakhs.
Is notice period buyout taxable?
Notice period buyout recovered by your employer is typically not taxed as it's a recovery, not income. However, if your new employer reimburses the buyout as part of signing bonus, that reimbursement is taxable as salary income.
Can companies legally enforce 3-month notice periods?
Yes, notice periods mentioned in your employment contract are legally binding. Companies can withhold your relieving letter, experience certificate, and full & final settlement if you don't comply. However, many companies negotiate on this.
Can I negotiate notice period buyout?
Absolutely! You can negotiate with both employers. Ask your current employer for early release (common for good performers). Ask your new employer for a signing bonus to cover buyout, or request buyout reimbursement in your offer letter.