As for the issue of `iddah in case of separation through khul`, it is, according to the correct scholarly view, one menstrual cycle, as is indicated by the Sunnah. During this period, the woman is allowed to go for her work, and practice her daily life normally. The sole restriction is that she is not allowed to marry during this period.

In this regard, Sheikh Muhammad Saleh Al-Munajjid, a prominent Saudi scholar and lecturer, states:
“1- Khul`, in principle, can only occur at the request of the wife, and with the husband’s subsequent agreement to end the marriage.
2- `Iddah is obligatory upon every woman who leaves her husband, or whose husband leaves her, whether the cause is Talaq (divorce), annulment of the marriage or the death of the husband, except when the divorce occurs before the marriage has been consummated, in which case the woman does not have to observe `Iddah (waiting period), because Allah says: “O you who believe! When you marry believing women, and then divorce them before you have sexual intercourse with them, no `Iddah (waiting period) have you to count in respect of them” (Al-Ahzab: 49)
3– With regard to the `Iddah following Khul`, the correct scholarly view is that it is one menstrual cycle, as is indicated by the Sunnah.
It was narrated from Ibn `Abbas that the wife of Thabit ibn Qays ended her marriage to her husband by means of Khul` at the time of the Prophet, peace and blessings be upon him. The Prophet , peace and blessings be upon him, commanded her to observe an `Iddah of one menstrual cycle. (Narrated by At-Tirmidhi and Abu Dawud)
Ibn al-Qayyim, may Allah shower him with His mercy,said: “In the fact that the Prophet, peace and blessings be upon him, commanded the woman who ended her marriage through Khul` to observe an `Iddah of one menstrual cycle; but there appear two rulings on this case, supported with proofs, as follows:
The first is that she does not have to wait for three menstrual cycles, rather one menstrual cycle is sufficient. Just as this is clearly the Sunnah, it was also the view of `Uthman ibn ‘Affan, `Abd-Allah ibn ‘Umar ibn al-Khattaab, Ar-Rabi` bint Mu`awwadh and her paternal uncle, who was one of the greatest Companions. We do not know of anyone who held a different opinion, as Al-Layth ibn Sa`d narrated that Nafi` the freed slave of Ibn `Umar heard Ar-Rabi’ bint Mu’awwadh ibn `Afra’ telling `Abd-Allah ibn `Umar, may Allah be pleased with him, that she had ended her marriage to her husband by Khul` at the time of `Uthman ibn `Affan, and her paternal uncle had come to `Uthman ibn `Affan saying, “The daughter of Mu`awwadh ended her marriage by Khul` today, so should she move (from the marital home)?” `Uthman said: “She should move, and there is no inheritance between them, and she does not have to observe any `Iddah, but she should not remarry until one menstrual cycle has passed, lest she be pregnant.” `Abdullah ibn ‘Umar said: “and ‘Uthman was the best of us and the most knowledgeable.”
This view was also shared by Ishaaq ibn Raahawayh and Imaam Ahmad, according to one report narrated from him. It was also the view favoured by Shaykh al-Islam Ibn Taymiyah.
Those who supported this view said: this is in accordance with the principles of Shari`ah. The `Iddah(in the case of Talaq (divorce)) was made three menstrual cycles in order to lengthen the time during which the husband may take back his wife, so that the husband will have enough time to rethink the matter and to be able to take his wife back during this time. But in the case of Khul` the wife is not going back and the purpose is simply to establish whether she is pregnant or not, so one menstrual cycle is sufficient. They said: this does not contradict the ruling that the `Iddah for a woman divorced by Talaq (divorce) is three months. In the case of divorce the `Iddah is the same whether it is a final Talaq (divorce) or a revocable Talaq (divorce).”
The second view is that of the majority of Muslim scholars who maintain that the `Iddah of such a woman is three menstrual cycles as is the case with a woman who is divorced.
In the Kuwaiti Encyclopedia of Islamic Jurisprudence, we read: “The Majority of Jurists (The Hanafis, the Shafi`is, the Hanbalis, the Malikis) are of the view that the `Iddah of a woman divorced by means of Khul` is the same as a woman who is divorced normally, that is three menstrual cycles. This view is also held by Sa`id ibn Al-Mussayeb, Salim ibn `Abdellah, Sulayman ibn Yasar, `Umar ibn `Abdel-`Aziz, Al-Hasan, Ash-Sha`by, An-Nakh`I and Az-Zuhry.
Supporting their view, they cite the verse: “Women who are divorced shall wait, keeping themselves apart, three (monthly) courses.” (Al-Baqarah: 228). They further say: “Since Khul` is a form of separation, then the `Iddah (waiting period) resulting from it is as the same as that due in case of divorce.””