Notice Period Buyout: Should Employees Pay Gross or Basic Salary for a 1-Month Exit?

What is the policy for an employee who wants to buy out the notice period instead of serving it? Should he/she be paying the gross or basic if the notice period is 1 month?

Thank you.

Should be basic only as allowances are not given or considered for the said period. If you provide DA, then it should also be considered. However, many companies request for the Net salary (after deduction of taxes, as tax is not applicable on the income not made). Additionally, any other subsidies or deductions should not be considered in the amount.

What is the 'exact' wording written in the employment agreement (Appointment letter)?

Best Regards, Amod.

A notice period buyout should always be on a gross basis. If the employee had worked, you would have to pay the full amount. Therefore, for settling the notice period, the gross amount should be taken.

Also, check the standing orders (if applicable) and the appointment letter to see if anything is specified for this purpose.