Gratuity Calculator (Pakistan)
Updated November 2026 · Free · No sign-up
Calculate gratuity in Pakistan — the standard: 30 days’ gross wages per completed year of service on the LAST drawn salary, payable on any cessation after the qualifying period.
Quick answer: Pakistan’s gratuity (Standing Orders/provincial laws): 30 days’ wages × completed years, at the last drawn rate — resignation included after qualifying service. Ten years at Rs 150,000 final salary = Rs 1,500,000. Employers running a recognized PF may substitute it.
The Rule
Under the Standing Orders Ordinance (and provincial successors post-18th Amendment), commercial/industrial employees earn 30 days’ wages per completed year (fractions over 6 months count as a year), based on the last drawn wages — payable on resignation, retirement, termination (not gross-misconduct dismissal where proven), or death (to heirs).
Worked Examples
Example 1. Rs 150,000 final, 10 years: Rs 1.5M — the one-month-per-year framing makes Pakistan’s among the region’s richer formulas (India’s 15/26 ≈ 0.577 month/year).
Example 2 — rounding. 9 years 7 months → 10 years by the 6-month practice; 9 years 5 months → 9.
Example 3 — the PF substitution. Employers maintaining a recognized provident fund (with equal contributions) may be exempt from gratuity where the scheme so provides — one or the other; check your appointment letter.
Tax
Gratuity enjoys exemptions by employer type: government fully exempt; approved funds/schemes exempt to limits (Rs 300,000 area for approved, less for unapproved) — the excess taxes as salary with averaging relief available.
Claiming
Payable with final settlement; labour courts enforce (provincial jurisdiction post-devolution — Sindh’s 2015 Act, Punjab’s ordinances mirror the core). Document the last-drawn wage (gross, including regular allowances per case law) — base disputes are the usual fight. EOBI pension and gratuity are independent — collect both.
Frequently Asked Questions
How is gratuity calculated in Pakistan?
30 days’ gross wages per completed year at the LAST drawn salary — 10 years on Rs 150,000 = Rs 1.5M; 6+ month fractions round up by practice.
Do I get gratuity if I resign?
Yes — after qualifying service, gratuity pays on resignation, retirement, termination, or death (heirs); only proven gross-misconduct dismissal forfeits.
Is gratuity on basic or gross?
Last-drawn WAGES — case law reads regular allowances into the base; pure basic-only computations understate most claims.
Can provident fund replace gratuity?
Employers with recognized equal-contribution PF schemes may substitute where the scheme provides — one benefit or the other, per your terms.
Is Pakistani gratuity taxable?
Exempt fully (government) or to limits (approved schemes ~Rs 300k; unapproved less) — excess taxes as salary with averaging relief.
✓ Formula verified • Last updated: November 3, 2026