How is gratuity calculated in Pakistan?

Under the Standing Orders Ordinance, a workman is entitled to 30 days' wages for every completed year of service. Because 30 days equals one month, the gratuity works out to your last-drawn monthly wage multiplied by your credited years of service.

Yes. Service in the final year that exceeds six months is credited as a full year. So six years and eight months of service counts as seven years. Less than six months in the final year is not counted as an extra year.

Is there a minimum service period?

Generally yes. Gratuity entitlement typically requires at least one completed year of service. If your credited service is under a year, the tool shows no entitlement, in line with the usual qualifying threshold.

When is gratuity not payable?

Gratuity is forfeited if you are dismissed for proven misconduct. Resignation, retirement, redundancy and ordinary termination all normally qualify. Also note that gratuity applies where the employer does not run a provident fund; where a PF exists, the worker usually receives PF instead.

Is this an exact legal calculation?

No. It is an estimate of the statutory gratuity. Exact entitlement depends on the applicable provincial labour law, your contract, and whether a provident fund or company gratuity scheme applies. Consult your HR department or a lawyer for a binding figure.

Pakistan Gratuity / End-of-Service Calculator

Email me this result

Get this tool's output sent to your inbox, plus one useful tool a week. No spam, unsubscribe any time.

A Pakistan gratuity calculator that works out your statutory end-of-service benefit under the Standing Orders Ordinance: 30 days’ last-drawn wages for every completed year of service.

How it works

Because 30 days equals one month, the rule simplifies neatly. The tool first decides how many years to credit, then multiplies by your last-drawn monthly wage:

creditedYears = completed years
                + 1 if leftover months in the final year exceed 6
gratuity      = lastMonthlyWage * creditedYears

A reason check is applied: dismissal for proven misconduct forfeits gratuity, and credited service of under one year generally falls below the qualifying threshold.

Example and notes

With a last-drawn wage of Rs 80,000 and 6 years 8 months of service, the eight extra months exceed six, so you are credited with 7 years. Your gratuity is 80,000 × 7 = Rs 560,000.

This is an estimate of the statutory gratuity. Gratuity applies where the employer does not operate a provident fund; where a PF exists, the worker usually receives the PF instead. Exact entitlement depends on the applicable provincial labour law and your contract. All figures are computed locally in your browser and are not legal advice.