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Pension Calculator Pakistan
Enter your average basic pay of the last 24 months and total qualifying service to estimate your monthly pension. This tool helps you get an estimate for planning.
Example: A government employee in Punjab with 10 years service.
For federal government employees, pension is now based on the average pensionable emoluments of the last 24 months as per Finance Division circular of Jan 2025. Provincial rules can differ, please confirm with your AG office.
Employees appointed under the Defined Contribution Pension Scheme Rules 2024 may not be covered by this old formula. Please check finance.gov.pk for your case.
Pension Calculator Pakistan - Calculate Monthly Pension & Commutation Amount
Pension planning is easier when you know the basic formula used by many departments. Retirement planning matters a lot for every government employee in Pakistan. After serving for many years, a monthly pension is a steady source of income that provides financial security for life.
My Pension Calculator Pakistan helps you estimate your monthly pension, commuted pension, and lump sum commutation amount based on your average basic pay of the last 24 months and qualifying service years. Based on average emoluments formula mentioned in Finance Division circulars. Provincial rules may differ. This calculator is quick, free to use, and keeps your salary details private on your own device.
How Government Pension Works in Pakistan
Pension is the monthly amount that a government employee receives after retirement from service. It is like a lifelong financial reward for the years of service given to the government.
In Pakistan, federal and provincial government employees are eligible for pension after completing their qualifying service. In addition to the monthly pension, employees also have the option to convert a part of their monthly pension into a one-time lump sum payment. This process is called commutation.
So, after retirement, a pensioner gets two things:
- A reduced monthly pension that continues for life
- A large lump sum amount paid once at the time of retirement
You need to understand both amounts for financial planning after retirement.
How This Pension Calculator Works
This calculator estimates your pension using the standard formula used by the Government of Pakistan.
Step 1 - Full Monthly Pension Calculation:
Full Pension = Average Basic Pay of last 24 months x Years of Qualifying Service x 7 / 300
Here, qualifying service is counted up to a maximum of 30 years. Even if you have served for 33 years, your pension will be calculated on 30 years. At 30 years the formula gives 70% of your pay (30 x 7 / 300).
Step 2 - Commuted Pension Calculation:
Government employees in Pakistan can commute up to 35% of their full monthly pension into a lump sum.
Commuted Amount (Monthly) = Full Pension x 35%
Remaining Monthly Pension = Full Pension - Commuted Amount
So after commutation, you will receive 65% of your full pension every month for life.
Step 3 - Commutation Lump Sum Calculation:
The lump sum you receive is calculated using a commutation factor, which depends on your age at the time of retirement.
Lump Sum = Commuted Amount (Monthly) x 12 x Commutation Factor
The commutation factor is generally taken from the commutation table issued by the Finance Division. You can check the latest table on the Finance Division website for reference. This factor has a very big impact on your final lump sum amount.
Pension Calculation Example for Government Employees
Take a practical example for a federal government employee.
Suppose your average basic pay of the last 24 months is 80,000 PKR with 30 years of service. With the 7/300 formula, your estimate will be around (80,000 x 30 x 7) / 300. This is just an example to help you understand.
Full Monthly Pension = 80,000 x 30 x 7 / 300
= 2,400,000 x 7 / 300 = Rs 56,000 per month
Commuted Amount = 56,000 x 35% = Rs 19,600 per month
Remaining Monthly Pension = 56,000 - 19,600 = Rs 36,400 per month
Lump Sum = 19,600 x 12 x 9
= 19,600 x 108 = Rs 2,116,800
So, in this example, you will get a one-time lump sum of Rs 2,116,800 at retirement and then Rs 36,400 every month for life.
This is the same method the tool uses to calculate your pension and commutation.
This is an illustration only. Commutation factors are taken from the official table. See Finance Division.
How to Use This Pension Calculator Pakistan
Check your last 24 months basic pay from your pay slip, enter it here, and add your total service years.
Tips for a Better Pension Estimate
Pension calculation is very sensitive, so you should be careful about these points.
1. Pension Rules Change with Budget: Pension rules, increase rates, and commutation tables for federal and provincial employees may change when the annual government budget is announced. Sometimes the government announces an increase in pension or changes the commutation percentage. So always confirm the current rate with your AG office (Accountant General Office) or your department's accounts section before final planning.
2. Enter Basic Pay, Not Gross Pay: This is the most common mistake. Many employees enter their total gross salary including house rent, medical allowance, and conveyance allowance. Pension is calculated only on your basic pay, not on gross pay. Allowances like house rent or medical are generally not included. So always enter your basic pay as per your last pay slip.
3. Count Only Qualifying Service: Not all service years are counted as qualifying service. For example, extraordinary leave without pay or some types of service may not be counted. Also, pension is calculated on a maximum of 30 years. If you served 33 years, it will still be calculated as 30 years in this formula.
4. Understand the Commutation Factor: Many people ignore the commutation factor, but it affects your lump sum amount more than you think. The commutation factor is based on your age. A younger age at retirement usually means a higher factor and a larger lump sum. Ask your accounts office about the correct factor for your age at retirement.
Key Points About Government Pension Rules
Your actual pension depends on many factors including your service rules, your average emoluments for the last year, your total qualifying service, and the latest government announcements regarding pension.
Rules can differ between departments and provinces, so confirm with your accounts office. Some offices may use the average of the last 12 months, while others use the last 24 months. Some have different rules for voluntary retirement vs superannuation retirement. Commutation is optional - you can choose to commute less than 35% or not commute at all to get a higher monthly pension.
Therefore, always treat this calculator's result as a close estimate and double-check the numbers with your accounts office or AG office before you make any financial plan around your retirement.
Commutation Option
Many pensioners choose to get some pension as a lump sum (commutation) and rest monthly. The commutation factor depends on age at retirement. The final decision is made by your accounting office. My tool shows a gross pension estimate; the commutation amount is separate as per table.
Frequently Asked Questions
How is pension calculated in Pakistan?
The basic formula is: Average Basic Pay of last 24 months x Service Years (maximum 30) x 7 / 300. This gives you the full monthly pension.
What is the commutation of pension?
Commutation is an option where you can take a part of your monthly pension (up to 35%) as a one-time lump sum payment at retirement. In return, your monthly pension is reduced by that percentage.
How reliable is this calculator?
This calculator gives you an estimate only to help you plan. It is not an official calculation. Final pension is decided by your accounts office as per current rules.
Where can I find my commutation factor?
You can find the commutation factor table from the official notification issued by the Finance Division, or you can ask your AG office or accounts department.
Where to Find Official Pension Information
Pension rules, rates, and commutation tables can be updated by the government at any time. For official pension rules and latest notifications, please visit the Finance Division and your respective Accountant General Office website.
Also read my detailed comparison: Difference Between Gratuity and Pension in Pakistan
Finance Division Official Site
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Loan EMI Calculator PakistanLast updated: 15 October 2026 | Reviewed by Habiba, founder of PakCalculators.com. Formula based on Finance Division notification: Gross Pension = Average Basic Pay of last 24 months x Service Years x 7 / 300, with commutation as per age table. Please verify from AG Office. See my Disclaimer.