Gratuity Calculator Pakistan
Work out the gratuity you are owed when you leave a job in Pakistan: 30 days of your last drawn wages for every completed year of service, with six months or more counting as a full year, under the Standing Orders Ordinance.
How this is calculated
Under Standing Order 12(6) of the Industrial and Commercial Employment (Standing Orders) Ordinance 1968 (and the near-identical Sindh Act of 2015), a workman whose service is ended by the employer, or who resigns after continuous service, is paid gratuity of 30 days' wages for every completed year of service or any part in excess of six months, based on the last drawn wages.
- Daily wage = monthly wage ÷ 30.
- Gratuity = daily wage × 30 × counted years, where a final part-year of six months or more counts as one.
- Wages means basic pay plus dearness and cost-of-living allowances; bonus, overtime and travelling allowance are excluded.
- The employer may instead maintain a provident fund or pension scheme with contributions at least equal to gratuity; it cannot skip both.
Contract, daily-wage and piece-rate workers qualify once service is continuous for a year. Government service and some sectors (banking under separate rules) differ.
Frequently asked questions
- Do I get gratuity if I resign?
- Yes. Resignation after at least a year of continuous service qualifies; dismissal for misconduct is the exception the law allows.
- Is gratuity calculated on gross or basic salary?
- On wages as defined in the Ordinance: basic plus dearness and cost-of-living allowances, at the last drawn rate. House rent, conveyance, bonus and overtime are not part of it.
- Is gratuity taxable?
- Gratuity from an approved fund is exempt. From an unapproved scheme, exemption is limited (the lower of a fixed cap and 50% of the amount) under the Second Schedule; the rest is added to salary income.
- Can the employer pay provident fund instead of gratuity?
- Yes, if the fund is approved and the employer's contribution is not less than the gratuity would be. Many companies run both; the law requires one.
Sources
- Industrial and Commercial Employment (Standing Orders) Ordinance 1968, Standing Order 12(6); Sindh Terms of Employment (Standing Orders) Act 2015: Provincial labour departments
Version 1.0.0 · reviewed 15 Sept 2026. Rates change with the Federal Budget and regulator notifications; we update this tool when they do. Confirm with the primary source before making financial decisions.