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Gratuity Calculator Pakistan
Estimate your end of service gratuity by entering your last drawn salary and total years of service. The result follows the common formula used under Pakistan's Standing Orders.
Example: A government employee in Punjab with 10 years service.
Gratuity Calculator Pakistan - Calculate Your End of Service Gratuity Amount
Gratuity is usually paid at the end of service as per company policy. When an employee leaves a company after a long period of service, the employer often pays a lump sum amount as a token of appreciation. This payment is called Gratuity. It is an important financial benefit for employees in Pakistan.
My Gratuity Calculator Pakistan helps you estimate your gratuity amount quickly based on your last drawn salary and total years of service. It is based on the most common formula used in Pakistan. It calculates quickly, is completely free, and keeps your salary information private on your own device.
What Gratuity Means for Private Employees
Gratuity is a lump sum benefit paid by an employer to an employee when the employee leaves the job after completing a certain period of service. It can be paid at the time of retirement, resignation, or termination, depending on the company's policy.
In Pakistan, gratuity is considered an end-of-service benefit. It is different from your monthly salary, provident fund, or pension. It is a one-time payment given to reward your long-term service and loyalty to the organization.
While there is no single nationwide law that makes gratuity compulsory for all private companies in Pakistan, many reputable organizations, factories under standing orders, and companies that have it written in their appointment letters or HR policies do provide gratuity to their employees. It is a very common practice in both private and public sector organizations.
How Does This Gratuity Calculator Work?
This calculator estimates your gratuity using the most common and widely accepted basis in Pakistan: one month's last drawn salary for every completed year of service.
Formula: Gratuity Amount = Last Monthly Salary x Total Years of Service
For example, if your last salary is Rs 50,000 and you have worked for 5 years, your gratuity would be 50,000 x 5 = Rs 250,000.
The calculator also shows your daily wage for reference.
Formula: Daily Wage = Last Monthly Salary / 30
This daily wage calculation is often used by companies when they calculate gratuity on a per-day basis or for partial years. For instance, if your monthly salary is Rs 60,000, your daily wage would be Rs 2,000.
It is a simple method, but please note that some companies may have different formulas. Some may use basic salary instead of gross salary, and some may give more than one month's salary per year for longer service.
Gratuity Calculation Example for Private Sector Employees
Let me take a real-life example to see how gratuity is calculated in Pakistan.
Suppose you are working in a company in Lahore and your last drawn monthly salary is Rs 60,000. You have completed 8 years of continuous service in the company and now you are resigning.
Calculation:
Gratuity = Last Monthly Salary x Years of Service
Gratuity = 60,000 x 8 = Rs 480,000
Your daily wage would be:
Daily Wage = 60,000 / 30 = Rs 2,000 per day
So, according to the standard formula, you would be eligible for a gratuity of Rs 480,000.
If your company counts 15 days of salary per year instead of 30 days, the amount would be half. This is why you must check your company policy.
How to Use This Gratuity Calculator Pakistan
Enter the salary mentioned in your appointment letter and total years you worked.
Tips to Get a Correct Gratuity Estimate
Follow these simple points to make sure your gratuity calculation is as close to actual as possible.
1. Check Your Appointment Letter First: The most important step is to check your appointment letter, offer letter, or company HR policy. Some employers offer one month's gross salary per year, some offer one month's basic salary per year, and some offer more than one month per year after a certain period, like 10 years. Your final gratuity depends completely on what is written in your contract.
2. Understand Completed Years vs. Prorated Calculation: Some companies count only fully completed years of service. For example, if you have worked for 5 years and 7 months, they may count only 5 years. Other companies calculate it on a prorated basis and include partial years. For example, they might calculate 5.5 years. You need to confirm how your company handles partial years.
3. Keep Your Records Safe: Always keep your service record, appointment letter, salary slips, and experience letter safe. These documents are proof of your years of service and last drawn salary. In case of any dispute, these documents will help you get your correct gratuity amount.
4. Confirm Basic vs. Gross Salary: This detail changes the final amount a lot. If your gross salary is Rs 60,000 but your basic salary is Rs 30,000, your gratuity will be half if your company uses basic salary. Ask your HR department clearly whether they use basic salary or gross salary for gratuity calculation.
Important Information About Gratuity in Pakistan
Your actual gratuity amount depends on several factors that can vary from company to company.
Your real gratuity depends on your appointment letter, your company's internal HR policy, any applicable labour laws such as the Standing Orders, and what exactly is defined as salary in your contract.
For employees working in shops and establishments, factories, or under specific industrial standing orders, there may be specific legal provisions. For other private sector employees, it is mostly governed by the contract between the employer and the employee.
Also, for tax purposes, gratuity handling can be different. In some cases, gratuity received from an approved gratuity fund may have different tax treatment. So, it is always wise to talk to a tax advisor or your company's finance department.
So, treat the number shown by this calculator as an estimate for your planning, and always confirm the exact terms, formula, and final amount with your HR department or employer.
What Gratuity Does Not Cover
Gratuity is not automatic everywhere. It depends on your appointment letter. Some companies pay after 1 year, some after 5 years. Some exclude contract or daily wage staff. Check if your company deducts gratuity from salary or pays separately. This tool gives an estimate only, not legal advice.
Frequently Asked Questions
What is the gratuity formula in Pakistan?
The most common formula used in Pakistan is: Gratuity = Last Monthly Salary x Total Years of Service. This is usually calculated as one month's salary for each completed year of service.
Who is eligible for gratuity?
Eligibility depends on the company's policy. Eligibility depends on your contract and the applicable labour rules.
Is gratuity taxable in Pakistan?
Tax treatment of gratuity depends on whether it is paid from an approved gratuity fund and the current tax rules. In many cases, it may have special tax handling. It is smart to consult a tax advisor for accurate information.
What is the difference between gratuity and provident fund?
Provident fund is a fund where both you and your employer contribute monthly, and you get the total amount with interest at the end. Gratuity is a separate lump sum amount paid entirely by the employer as a reward for your long service. It is not deducted from your salary.
Learn More About Gratuity Rules
Labour laws and company policies can change over time. For the latest information regarding labour laws, you can refer to the official websites of the Provincial Labour Departments or the Employees' Old-Age Benefits Institution (EOBI) for related benefits.
Also read: How Gratuity is Different from Pension in Pakistan
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Age Calculator PakistanLast updated: 15 October 2026 | Reviewed by Habiba, founder of PakCalculators.com. Based on common practice under Standing Orders Ordinance 1968. For official settlement, contact your HR department. Please see my Disclaimer.