and notice buyout
Notice Period Calculator: Last Working Day and Notice Buyout Amount: This free notice period calculator finds your last working day from your resignation date and notice period, in days or months. If you want to leave early, it works out the notice period buyout amount for the days you don't serve. It covers:
- leave adjusted against notice;
- gross or Basic + DA as the base, at monthly ÷ 30 or ÷ 26;
- the share your new employer pays;
- notice pay when your employer ends your job without full notice.
Notice Period Buyout Formula
Example (calculator default): resignation on 19 October 2026 with 60 days' notice, starting the same day. The last working day is 17 December 2026. To leave on 30 November, 17 days are not served; 5 days of leave are adjusted, leaving 12 days. On ₹80,000 gross, the buyout is 80,000 ÷ 30 × 12 = ₹32,000.
| Notice period | Resign on 19 Oct 2026, notice from the same day | Buyout of the full notice on ₹80,000 gross |
|---|---|---|
| 30 days | 17 Nov 2026 | ₹80,000 |
| 60 days | 17 Dec 2026 | ₹1,60,000 |
| 90 days | 16 Jan 2027 | ₹2,40,000 |
| 1 month | 18 Nov 2026 | ₹80,000 |
| 2 months | 18 Dec 2026 | ₹1,60,000 |
| 3 months | 18 Jan 2027 | ₹2,40,000 |
A notice period in months ends the day before the same date in the last month, so 2 months from 19 October ends on 18 December (61 days). A notice period in days counts calendar days, including weekends and holidays.
How the Last Working Day Is Counted
| Company practice | 60 days' notice, resignation on 19 Oct 2026 |
|---|---|
| Notice starts the same day (resignation day = day 1) | Last day 17 Dec 2026 |
| Notice starts the next day | Last day 18 Dec 2026 |
Your appointment letter or HR policy decides which day counts first. Pick "Same day" or "Next day" in the calculator to match it, and confirm the date in your resignation acceptance email.
Notice Period Rules in India (2026)
| Situation | Rule |
|---|---|
| You resign | Notice is set by your appointment letter, company policy or standing orders; 30, 60 and 90 days are common. No central law fixes a single notice period for resignation. |
| Buyout or early release | Allowed only if your contract or employer permits it. The employer can accept, reduce or refuse it. |
| Employer retrenches a worker | One month's written notice with reasons, or wages in lieu, for a worker with at least one year of continuous service (Section 70, Industrial Relations Code, 2020). Establishments with 300 or more workers need three months' notice or pay in lieu and prior government permission. |
| Final wages | Within 2 working days of the last working day (Section 17(2), Code on Wages, 2019) |
| Deductions from wages | Only those authorised under Section 18 of the Code on Wages, and in total not more than 50% of wages in a wage period |
The Industrial Relations Code, 2020 came into force on 21 November 2025. Retrenched workers also get compensation and a re-skilling fund payment; see the full and final settlement calculator for the rest of your dues.
Notice Buyout: Gross or Basic Salary?
Your contract decides. Many companies recover notice pay on gross salary; some use Basic + DA. The difference is large: on ₹80,000 gross with ₹40,000 Basic + DA, 12 days cost ₹32,000 on gross but ₹16,000 on Basic + DA.
The per-day rate is usually monthly salary ÷ 30, because notice runs in calendar days. If your company uses ÷ 26, it should count only working days; the calculator then leaves Sundays out of the days bought out.
Adjusting Leave Against Notice Period
Some companies let you set off earned leave against the notice period, so you leave earlier without paying. Others don't allow it, or allow it only with the manager's approval, because earned leave and notice are separate. If your policy allows it, enter the leave days in the calculator; they are taken off the days you would otherwise buy out. If not, unused earned leave is paid out as leave encashment in your final settlement.
Is Notice Pay Taxable? Is GST Charged?
| Payment | Treatment |
|---|---|
| Notice pay you receive (employer ends your job without notice) | Taxable as salary |
| Buyout paid by your new employer | Generally taxable as salary in your hands |
| Buyout recovered from your salary by the old employer | The Ahmedabad ITAT (Nandinho Rebello v. DCIT, 18 April 2017) held that only the net salary actually received is taxable. Check that your Form 16 shows the recovery. |
| GST on notice pay recovery | Not charged. CBIC Circular 178/10/2022-GST (3 August 2022) treats it as not a supply; the Kerala High Court applied this in Manappuram Finance (2022). |
To see the tax on your final pay, use the TDS on salary calculator.
Tips Before You Buy Out Your Notice
- Ask HR for the release date, buyout amount and salary base in writing before you accept the new offer's joining date.
- Ask your new employer whether they will pay the buyout, and get it in the offer letter.
- Check whether leave can be adjusted; it can cut the cost to zero.
- Check the full and final settlement: the buyout is usually recovered from your last salary, leave encashment and other dues.
- Make sure your relieving letter and experience letter are issued on your last day.
How to Use This Notice Period Calculator
- Choose whether you are resigning or your employer is ending the job.
- Open Notice period: enter the date notice was given and the notice period, in days or months, and choose whether notice starts the same day or the next day.
- Open Early release: enter the last day you want (leave blank to serve full notice) and any leave your company lets you adjust.
- Open Salary: enter gross and Basic + DA, and choose the base and per-day rate your contract uses.
- Open New employer: enter the share of the buyout your new employer pays, if any.
- Read your last working day, the buyout amount and the cost of leaving 15, 30, 45 or more days early. Use Copy to send it to HR.
Frequently Asked Questions
How do I calculate my last working day?
Add the notice period to the date notice starts and subtract one day. 60 days from 19 October 2026, counting 19 October as day 1, ends on 17 December 2026. If notice starts the next day, it ends on 18 December.
How is notice period buyout calculated?
Monthly salary (gross or Basic + DA, as your contract says) ÷ 30 × the notice days you don't serve. 12 days on ₹80,000 gross is ₹32,000.
Is notice period counted in calendar days or working days?
Usually calendar days, including weekends and holidays, unless your contract says working days. A notice period in months ends the day before the same date in the last month.
Can my employer refuse a notice period buyout?
Yes, unless your contract gives you a right to buy out. The employer can ask you to serve the notice, agree to a shorter release, or accept a buyout. Get any agreement in writing.
Can I adjust earned leave against my notice period?
Only if your company policy or manager allows it. If not, unused earned leave is paid as leave encashment in your full and final settlement.
Is GST charged on notice period recovery?
No. CBIC Circular 178/10/2022-GST dated 3 August 2022 says notice pay recovered from an employee is not a supply, so no GST is charged.
Is notice pay taxable?
Notice pay you receive is taxable as salary, and so is a buyout your new employer pays for you. Where the old employer recovers notice pay from your salary, the Ahmedabad ITAT has held that only the net salary received is taxable.
What notice must an employer give before retrenchment?
One month's written notice with reasons, or wages in lieu, for a worker with at least one year of continuous service, under Section 70 of the Industrial Relations Code, 2020. Establishments with 300 or more workers need three months' notice and government permission.
Can the buyout be deducted from my final settlement?
Employers usually recover it from the last salary and other dues if the contract allows. Deductions from wages are limited to those authorised under Section 18 of the Code on Wages, up to 50% of wages, so ask for an itemised statement.
When will I get my final salary after the notice period?
Within 2 working days of your last working day, under Section 17(2) of the Code on Wages, 2019. Gratuity, if due, is paid within 30 days.