How do I calculate notice-period recovery when an employee leaves early?

Notice-period recovery is the amount an employer recovers when a resigning employee does not serve the full notice period required by their contract. It is generally calculated as the salary corresponding to the number of notice days not served, based on the rate and components specified in the employment agreement or policy.

The practical steps are: confirm the contractual notice period and the shortfall in days; identify which salary components the policy uses for recovery (often basic, or basic plus certain allowances, rather than full CTC); compute the per-day rate on that base; and multiply by the unserved days. The exact base and method should follow the written contract, since recovery terms vary between organisations and an unclear policy is a frequent source of disputes.