FY 2026-27 · Marginal tax included

Notice Period Buyout Calculator India 2026

Calculate exactly how much you need to pay to buy out your notice period. See gross amount, tax deducted at your marginal rate, and net payout: instant, free.

Monthly CTC (₹)

₹

Your gross monthly cost to company

Notice Period Length

Total Notice Period (days)

days

Days Already Served

days

50 days remaining

Tax Regime (FY 2026-27)

Notice Period Buyout

Gross Amount

₹1,92,300

Net (After Tax)

₹1,20,632

50 days remaining · 15% marginal tax rate

Daily Rate (CTC / 26)

₹3,846/day

Days Remaining

50 working days

Gross Buyout

₹1,92,300

Tax Deducted (~15% marginal)

−₹71,668

Net Amount You Pay

₹1,20,632

Tax shown is an estimate based on your marginal slab. Actual tax may vary depending on your full annual income, deductions, and employer TDS calculation.

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How notice period buyout works

What you actually pay, how it is taxed, and how to reduce the cost.

You pay for the days you don't serve

Notice period buyout compensates your employer for the days remaining after your last working day. It is calculated as your daily CTC rate (monthly salary / 26) multiplied by remaining working days.

It is taxable as salary income

The buyout amount is added to your salary income for the year and taxed at your marginal slab rate. Under new regime FY 2026-27, rates go from 5% to 30% depending on your total taxable income.

New employer may cover it

In competitive hiring, many employers offer joining bonuses specifically to cover notice period costs. Always negotiate this upfront, before signing the offer letter, not after you've resigned.

Example: ₹1.2L/month CTC, 60-day notice, 10 days served

Daily rate: ₹1,20,000 / 26 = ₹4,615/day. Days remaining: 50. Gross buyout: ₹2,30,769. At 15% marginal tax (new regime), tax ≈ ₹34,615. Net buyout: ₹1,96,154. Compare this to asking your new employer for a ₹2.3L joining bonus to offset the cost.

Notice period buyout by CTC, quick reference

Gross buyout for 30 remaining days at different salary levels (new regime).

₹5L/yr (₹41.7K/month)

₹48,077

₹10L/yr (₹83.3K/month)

₹96,154

₹15L/yr (₹1.25L/month)

₹1,44,231

₹20L/yr (₹1.67L/month)

₹1,92,308

₹30L/yr (₹2.5L/month)

₹2,88,462

₹50L/yr (₹4.17L/month)

₹4,80,769

Formula: (Monthly CTC / 26) × 30 days

Ways to reduce your buyout cost

Negotiate early release

Ask your manager before resigning formally

Get new employer to pay

Negotiate joining bonus = buyout amount

Use earned leaves

Adjust remaining leaves against notice days

Mutual separation

Formal agreement to waive notice without buyout

Transfer within group

Internal moves often have waived notice periods

Questions

Frequently asked questions

Everything about notice period buyout in India.

How is notice period buyout calculated in India?

Notice period buyout = (Monthly CTC / 26) × remaining working days. Most companies use 26 working days per month. If your monthly CTC is ₹1,00,000 and you have 20 days remaining, the gross buyout is ₹76,923. Your employer deducts this from your full & final settlement or you pay it separately.

Is notice period buyout taxable?

Yes. Notice period buyout is salary income and taxed at your marginal slab rate. It is added to your total income for the financial year. Under new regime FY 2026-27: 5% (₹4–8L), 10% (₹8–12L), 15% (₹12–16L), 20% (₹16–20L), 25% (₹20–24L), 30% (above ₹24L taxable).

Can my new employer pay the notice period buyout?

Yes, in competitive markets, especially IT, many employers offer joining bonuses that cover buyout costs. This is negotiable at the offer stage. Ask explicitly. Note that a joining bonus paid by your new employer is also taxable income, so factor that in when comparing.

What happens if I leave without serving notice?

Your employer can withhold your full & final settlement, experience letter, and relieving letter. In extreme cases they can file a civil suit for recovery of the buyout amount. Always pay the buyout or get a written waiver before your last working day.

What is the standard notice period in India?

30 days for junior/mid-level roles, 60–90 days for senior roles, and up to 3–6 months for leadership positions. IT and BFSI companies typically enforce 60–90 day periods. Always check your appointment letter for the exact contractual obligation.

Can I negotiate a shorter notice period instead of paying buyout?

Yes. Many employers allow early release by mutual agreement, especially if your replacement has been identified. This is the best outcome: you serve a shorter period, your employer waives the remainder, and no money changes hands. Approach your manager early and in writing.

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