Shortfall is notice period is calculated on gross or basic salary

Hi All,

Wanted some clarity on recovering shortfall in notice period. Is the shortfall calculated on basic salary or gross salary? What is the industry practice for the same.

Regards,
Afrin Kanga

Industry practice is recovery to be made from gross salary.

But, why do you want to recover shortfall in notice period. Instead
you can ask the employee to surrender his Earned leave for adjusting
shortfall in notice period

The recovery of notice period is based on the policy of the company, maximum companies recover the same on basic pay.
Thanks

In general concept, Notice period recovery rate is quite simillar to rate of leave enchament rate paid while final settlement.

Dear Friend,

Recovery of notice period salary is based on the contract of employment. It is always specified in the contract of employment whether the recovery will be made on the basic salary or gross salary.

Warm Regards
Bharat Gera
AV Consultants
9322404765

Thank you all for sharing your insights

Its generally calculated with gross pay. However need to check with terms & condition clauses mentioned in appointment letter before execute.

Regards,
Kannan R

Generally it is seen in any Job Offer letter/Offer of Appointment under separation clause (Notice of
Termination) " you shall be serving ___ months notice to the company, should you seek separation from the company or ___ months salary in lieu of notice period"

This is a general clause - whether one months notice or one months salary OR 3 months notice or salary depends on company to company and cadre - position. It is, thus, written as salary and Salary need not be basic salary alone, it often includes, DA, HRA etc.

So, it is not wrong to say that shortfall in notice period is calculated based on full monthly salary and not on basic salary.