Gratuity Calculator Pakistan

How gratuity works in Pakistan

Gratuity is a lump-sum amount your employer pays when you leave — on retirement, resignation, or termination — after you complete the qualifying service period set in your company's policy. Unlike your monthly salary, it is paid once, at the end. Many employees in Pakistan only discover the exact formula on their last working day; this calculator removes that surprise.

The gratuity formula

Gratuity = (Last drawn monthly salary ÷ 30) × Day basis × Years of service

Worked example: last salary Rs 100,000, 5 years of service, 30-day basis → (100,000 ÷ 30) × 30 × 5 = Rs 500,000. That is exactly one month's salary per year — the most common arrangement.

The 30 vs 26 vs 15 days confusion

This single setting causes most gratuity disputes in Pakistan:

30-day basis: daily wage = salary ÷ 30. You get roughly one full month's salary per year of service. Most generous and most common.
26-day basis: excludes the 4 weekly offs. Daily wage is slightly higher, but you multiply by 26 — the total comes out a little lower than the 30-day basis.
15-day basis: half a month's salary per year of service. Common in some banks, multinationals and older company policies.

Always check your appointment letter or HR policy — the day basis written there is what your employer will actually use.

Gratuity vs provident fund vs EOBI

These three are often confused but are completely separate: gratuity is paid by the employer as a lump sum at exit; provident fund is a savings pot built from monthly employee + employer contributions, paid out with profit at exit; EOBI is the state pension scheme that pays a monthly pension after retirement age. You can be entitled to all three at once.

Frequently asked questions

What is gratuity in Pakistan?

A lump-sum end-of-service benefit paid by the employer when you leave after completing the qualifying service period. It is separate from provident fund and EOBI pension.

How is gratuity calculated in Pakistan?

Gratuity = (last drawn monthly salary ÷ 30) × day basis × years of service. A 30-day basis works out to roughly one month's salary per year of service.

Is gratuity taxable in Pakistan?

It is generally treated as salary income and may be taxable depending on the exemptions in force. Confirm the current treatment with a tax advisor for your specific case.

What's the difference between gratuity, provident fund and EOBI?

Gratuity: employer-paid lump sum at exit. Provident fund: contributory savings (you + employer). EOBI: state-run monthly pension after retirement age.

Estimates only, for planning. Actual gratuity depends on your employer's written policy, appointment letter terms and applicable labor laws. Confirm the day basis with HR before relying on this figure.