India offboarding planner.
Map the compliant exit for a resignation, termination, or redundancy. See notice pay, gratuity, leave encashment, final settlement deadline, and process risk by state. Wage Code 2019 + state practice.
Gratuity applies only after 5 complete years.
Annual salary divided by 12. Does not include PF or tax.
Changes notice, severance, and compliance process.
Typical India contracts: 30-90 days. Employer termination carries a 30-day floor.
Casual, earned, privilege combined. Capped per state.
Exit cost breakdown
- Notice pay (or in lieu)
- ·
- Leave encashment
- ·
Total exit settlement
·
All-in cost to the employer, before taxes/PF deduction.
Process risk & deadline
Assumes statutory minimum only. Actual costs may vary if employee claims disputed dues, bonus, or severance negotiation. Termination for cause requires documented grounds (attendance, conduct, performance). Always verify state-specific labour code rules and consult legal counsel for contested exits.
How the exit cost is built.
Notice and notice pay
Employer-initiated exits carry a 30-day notice floor (or pay in lieu) per Shops and Establishments practice; retrenchment requires 30 days under the Industrial Disputes Act. Resignation uses the contractual notice period. Pay-in-lieu = daily wage (salary / 26) x notice days.
Gratuity and tenure
Applies only after 5 years continuous service. Calculated as (Basic + DA) x 15/26 x years of service, capped at ₹20 lakh statutory maximum. Basic is assumed at 40% of gross here; enter your actual basic split for precision.
Leave and redundancy
Leave encashment: unused days x (salary / 26). Redundancy adds retrenchment compensation per the Industrial Disputes Act: 15 days x (salary / 26) x completed years. Final settlement deadline per the Code on Wages: 2 days; state practice: 30-45 days.
Worked example
On the default 3 year employee at ₹1,00,000 gross with a 30 day notice and 10 days of unused leave, the full and final settlement comes to ₹1,53,846.
India offboarding, answered.
The questions founders ask before and during an India exit.
Why do notice and pay-in-lieu work differently in India?
The Wage Code 2019 allows pay-in-lieu of notice (salary paid for notice days without the employee working). A termination typically carries 2 days notice minimum; resignation allows the employee to give notice instead. Redundancy must follow Code on Industrial Relations 2020 rules: minimum 30 days notice plus retrenchment compensation.
When does gratuity matter?
Gratuity applies only after 5 years continuous service, calculated as (Basic + DA) x (years / 26), capped at ₹20 lakh. If tenure is under 5 years, gratuity is zero. Always include it in your exit cost if the employee has hit that threshold.
What is leave encashment in India?
Unused leave (casual, earned, privilege) is paid out as salary on exit. Calculation: daily wage (Basic / 26) x remaining leave balance. Some states cap the payout (e.g., max 30 days), so verify your state rule before offering.
What is the new Wage Code final settlement deadline?
Wage Code 2019 requires final settlement (all accrued salary, leave, gratuity, statutory dues) paid within 2 days of exit. Older state rules allow 30-45 days; your state practice may still reflect the longer timeline. Check the state note in results.
When is this tool the wrong answer?
When the exit involves disputed claims (unpaid bonuses, performance disputes, NDA/non-compete breach), or severance negotiation beyond the statutory minimum. Speak to legal counsel instead of relying on a calculator. Termination-for-cause also requires documented grounds (attendance, conduct, performance) which this tool does not assess.
Longer reading: EOR services in India · India employment contract and compliance · Related tool: severance and exit cost calculator
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What the first call covers
30 minutesA cost comparison for your headcount, on your numbers, both routes.
- A written cost breakdown
- Entity documents before the call
- PF, ESI, TDS, termination law
- No follow-up sequence
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