Gratuity Calculator Pakistan (Private Sector)

Calculate your gratuity

How the gratuity is worked out

1. Years of service. Count the completed years. If the extra part after the last completed year is more than six months, it counts as one more year. Six months or less adds nothing.
2. Thirty days' wages. For a fixed-rated workman this is based on the wages in the last month of service. For a piece-rated workman it is based on the highest pay drawn in the last 12 months. This calculator treats one month's wages as thirty days' wages.
3. Multiply. Gratuity = thirty days' wages × the years counted.
4. Provident fund. If your employer runs a provident fund you contribute to, and the employer pays in at least as much as you do, no gratuity is payable for the period that fund existed (first proviso to Standing Order 12(6)). Enter those years to leave them out.

The rule, as retrieved

Where a workman resigns from service or his services are terminated by the employer, for any reason other than misconduct, he shall, in addition to any other benefit to which he may be entitled under this Ordinance or in accordance with the terms of his employment or any custom, usage or any settlement or an award of a Labour Court under the Punjab Industrial Relations Act 2010(XIX of 2010) be paid gratuity equivalent to Thirty days, wages, calculated on the basis of the wages admissible to him in the last month of service if he is a fixed-rated workman or the highest pay drawn by him during the last 12 months if he is a piece-rated workman, for every completed year of service or any part thereof in excess of six months

Industrial and Commercial Employment (Standing Orders) Ordinance, 1968, Schedule, Standing Order 12(6), as held in FAI's statute library (the version that refers to the Punjab Industrial Relations Act 2010)

Who this applies to

• Resignation or termination, not misconduct. Gratuity is paid whether you resign or your employer ends your job, unless you are dismissed for misconduct (Standing Order 12(6)).
• Establishments with twenty or more workmen. The Ordinance applies to industrial and commercial establishments with twenty or more workmen, or that had twenty or more on any day in the previous twelve months (section 1(4)(a)).
• Small industrial units. The gratuity clause does not apply, in the first instance, to an industrial establishment that had no more than forty-nine people on any day in the previous twelve months, unless the government extends it by notification (second proviso to section 1(4)).
• Government bodies with their own service rules are outside the Ordinance (first proviso to section 1(4)).
• Death in service. If a workman dies in service, the gratuity goes to the dependants through a deposit with the Commissioner under the Workmen's Compensation Act, 1923 (Standing Order 12(8)).
• Province. Sindh and Khyber Pakhtunkhwa have since passed their own standing orders laws, which FAI's library does not hold yet. If you work there, check that law.

Frequently asked

How is gratuity calculated in Pakistan for private employees?

Thirty days' wages for every completed year of service, plus one more year if the extra part is over six months, based on your last month's wages (Standing Order 12(6)). Example: last month's wages PKR 60,000 and 7 years 8 months of service give 8 years, so PKR 480,000.

Do I get gratuity if I resign?

Yes. Standing Order 12(6) covers a workman who resigns as well as one whose services are terminated, for any reason other than misconduct.

Is gratuity paid for less than one year?

Only if the service is more than six months: "any part thereof in excess of six months" counts as a year. Six months or less gives no gratuity.

Can my employer refuse gratuity because I am not a "workman"?

The rule is written for workmen. It depends on the kind of work you do and what your contract says: in 2021 SCMR 1785 the Supreme Court held that sales managers were not workmen. See our explainer on that judgment. Ask a labour lawyer about your own job.

Do allowances count in the wages?

The Standing Order says "wages", and what counts as wages can be disputed. Use the wages your employer paid in your last month, and ask a labour lawyer if your employer leaves out parts of your pay.

Is gratuity the same as EOBI?

No. EOBI is a separate old-age pension your employer pays into. See EOBI pension: who qualifies and how to check your record.

This page is general information, not legal advice. Last reviewed 12 October 2026.