If you leave without serving full notice, the shortfall is recovered as salary in lieu of notice. On a monthly salary of ₹40,000, one day is worth ₹1,333, so the table shows the amount for common notice shortfalls.
| Notice shortfall | Salary in lieu |
|---|---|
| 15 days | ₹20,000 |
| 30 days | ₹40,000 |
| 45 days | ₹60,000 |
| 60 days | ₹80,000 |
| 90 days | ₹1,20,000 |
When an employee resigns without serving the full notice period in the contract, the employer usually recovers pay for the unserved days, called salary in lieu of notice. The common method divides the monthly salary by 30 to get a one-day figure and multiplies by the shortfall. On ₹40,000 that is ₹1,333 a day, so 15 days short is ₹20,000 and 60 days short is ₹80,000.
The exact base (gross or basic) and the day divisor depend on the employment contract, so check your appointment letter. Notice pay is settled as part of the full and final settlement. See the notice period and full and final settlement definitions, and the settlement process guide.
Two points on ₹40,000 salary are worth knowing. First, a new employer will often buy out your notice, meaning they reimburse this amount so you can join sooner; on a 60-day shortfall that is ₹80,000, a figure worth negotiating into your offer. Second, whether the recovery is on gross or only basic makes a real difference: if only basic is used and basic is half of gross, the recovery roughly halves. Always confirm which base your contract names before you assume the figure in this table, and get any buyout agreement in writing.
Notice pay is a recovery, not an earning, so it reduces your final settlement rather than adding to it. It is set off against your pending salary, leave encashment and any gratuity, and only the net is paid out. If the recovery is larger than your dues, the balance is payable by you to the employer, which is why serving notice, or arranging a buyout, usually works out better than walking away.