Notice Period Buyout: What Leaving Early Costs
What the unserved months cost, and who usually pays.
How a buyout is calculated
A notice period is the time your contract asks you to keep working after you resign, commonly one to three months. If you leave sooner, the standard remedy is a buyout: you pay the employer your salary for the months you did not serve. The maths is simple proration, your monthly pay times the number of unserved months, but two details decide the size of the bill.
- Which salary figure. Some letters recover on basic pay, some on gross or monthly CTC. Gross can be almost double basic, so this one word changes the number a lot.
- How much you serve. Every month you do serve comes straight off the buyout, so partial notice is usually far cheaper than none.
Work out your buyout
Read the recovery figure off your letter, set your notice period, and slide to the amount you would actually serve. The tool shows the cost, and what serving no notice at all would cost, so you can see the value of serving even part of it.
What would a short notice cost you?
Enter the salary your letter recovers on, your notice period, and how much of it you would serve.
Weighing this against a new offer? Decode the letter to see the take-home and notice clause side by side.
Who actually pays, and what is fair
The number in the clause is not always what leaves your account. New employers routinely reimburse a notice buyout as part of the offer, so ask before you treat it as a personal cost. And like a service bond, a buyout is meant to recover the employer's genuine loss, not to punish you, so an amount wildly out of proportion to your salary is worth questioning. If in doubt, negotiate the notice down or ask to be released, which costs nothing to raise.
Reading an actual offer letter right now? Paste it in and we'll pull out the numbers, flag clauses like these automatically, and show your real monthly in-hand.
Decode your offer letter →Frequently asked questions
- How is notice period buyout calculated?
- It is your monthly salary times the number of unserved months. The key variable is which salary figure the clause names: basic or gross. Gross can be close to double basic, so the same notice can cost very different amounts depending on the wording.
- Does the new company pay my notice buyout?
- Often, yes. Many employers reimburse a notice buyout as part of the offer to bring you on sooner, so it is frequently not money from your own pocket. Always confirm this in writing before you assume you will bear the cost.
- Is a notice period buyout on basic or gross salary?
- It depends entirely on your letter, which is why you should read the exact clause. Some recover on basic pay, some on gross or monthly CTC. Because gross can be nearly double basic, this single detail can double your buyout.
Last reviewed August 2026.