Your inputs
Last drawn basic salary — not gross. Check your appointment letter for the exact clause.
Pakistani gratuity clauses vary by company. This calculator uses the most common private-sector formula (1 month of basic per completed year). Check your appointment letter for the exact terms.
Gratuity (standard formula)
Rs 320,000
Standard private-sector formula per common Pakistani employment contracts. This is a starting estimate — not legal or tax advice. Talk to your HR or a labour lawyer for your specific case.
The formula
One month of basic salary per year of service.
The standard private-sector gratuity formula in Pakistan is (last drawn basic ÷ 30) × 30 × years of service — which simplifies to one month of basic salary per completed year. Some employers use a different daily divisor (26 working days instead of 30) or include allowances — check your appointment letter for the exact clause.
Eligibility
Default: 1 completed year of continuous service. Many employers raise this to 5 years by company policy.
Salary basis
Last drawn basic salary at the time of leaving. Not gross. Not the average of the last 12 months unless your contract says so.
Years of service
Completed years only is the most common convention. The calculator supports decimals if your employer pro-rates partials.
No statutory cap
Unlike the UAE, Pakistan's standard formula has no upper cap. A 25-year veteran receives 25 months of basic salary.
FAQ
The questions PK teams ask us first.
This calculator is a starting point — not legal or tax advice. Specific cases vary; check with HR or a labour lawyer for your situation.
Is gratuity mandatory in Pakistan?
It depends on the company. Under the Industrial & Commercial Employment (Standing Orders) Ordinance, gratuity is the default end-of-service benefit unless the employer maintains a Provident Fund or Approved Gratuity Fund. Most large private-sector employers offer one or the other.
How is the minimum service period decided?
The default minimum is one completed year of service. Some companies require longer (commonly 5 years) per their own policy — set the threshold in the calculator to match your appointment letter.
Which salary should I enter — basic or gross?
Last drawn basic salary. Most Pakistani employment contracts compute gratuity on basic only — not on house rent allowance, conveyance, utility allowance, or other components. Check your appointment letter for your specific clause.
Do partial years count?
Typically no — most Pakistani gratuity clauses use completed years only. If your employer pro-rates partial years, use the decimal years input. The calculator handles both.
Is gratuity taxable?
Gratuity from an Approved Gratuity Fund is exempt from income tax up to a high statutory cap. Gratuity paid directly by an employer (not from an approved fund) is taxable as salary income. Talk to a tax advisor for your specific case.
What about Provident Fund?
Provident Fund is a separate end-of-service benefit (employee + employer contribute throughout employment). If your employer offers PF, you typically won't receive gratuity in addition — the two are alternatives, not stacked.
Run PK payroll on Naasflow
Gratuity tracked from day one, surfaced on exit.
Same calculation built into the platform — running every cycle, ready on the day a worker leaves. FBR, EOBI, gratuity, on one record.