Gratuity Calculator (Pakistan, 2026)
Pakistan gratuity under the Standing Orders laws = 30 days' last wages (one month) for each completed year of service, with a final part year of more than six months counted as a full year. In Balochistan the 2021 Act gives two months' wages per year. Gratuity is not due for years covered by a qualifying provident fund, or after dismissal for misconduct.
· Calculated with AiStaffo
The rules in Pakistan
| Law | Islamabad: West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968, Standing Order 12(6). Sindh: Terms of Employment (Standing Orders) Act, 2015. Khyber Pakhtunkhwa: Standing Orders Act, 2013. Balochistan: Standing Orders Act, 2021 (Standing Order 17). Punjab: 1968 Ordinance until the Punjab Labour Code, 2026 is notified |
|---|---|
| Who is covered | Workers of industrial and commercial establishments above the size threshold of each law (10 or 20 workers, depending on the province and type) |
| Amount | 30 days' (one month's) wages per completed year of service; two months' wages in Balochistan |
| Part years | A final part year of more than 6 months counts as a full year; 6 months or less is dropped |
| Wage used | Last month's wages for fixed-rate workers (pay plus regular allowances); highest pay in the last 12 months for piece-rate workers |
| Provident fund instead | No gratuity for years in which the worker was in a provident fund to which the employer contributed at least as much as the worker (outside Balochistan, where the fund is paid in addition) |
| Misconduct | Not paid on dismissal for misconduct (in Balochistan, part of it is forfeited) |
| Resignation | Paid in full; resignation does not reduce gratuity |
Worked example
Last monthly wage PKR 100,000, 5 years and 8 months of service. The 8 months are more than six, so 6 years count.
Islamabad, Punjab, Sindh or Khyber Pakhtunkhwa: 100,000 × 6 = PKR 600,000. Balochistan: 2 × 100,000 × 6 = PKR 1,200,000.
Provinces and the Punjab Labour Code
Labour is a provincial subject, so gratuity comes from a different law in each province. All of them pay at least 30 days' wages a year; Balochistan's 2021 Act doubles it to two months. Punjab passed the Punjab Labour Code, 2026, which takes effect on a date the Punjab Government notifies; until then the 1968 Ordinance applies to jobs ending in Punjab. Check the notification status before relying on the new Code's terms.
Gratuity, provident fund and EOBI
Gratuity is separate from the old-age pension paid by the Employees' Old-Age Benefits Institution (EOBI), which comes from monthly contributions. An employer that runs a provident fund with an employer share at least equal to the worker's may pay the fund balance instead of gratuity for those years (except in Balochistan). The worker keeps both shares of the provident fund even after resigning.
For employers: gratuity is one line of what a role costs
Gratuity, leave, statutory contributions and notice periods all sit on top of salary. Routine back-office roles such as data entry, follow-ups, reconciliations and reporting can be handed to AI workers that carry none of these costs. Book a free automation audit and we will put your own figures on it.
Please note: this calculator follows the published law and common practice as checked on 21 October 2026. It is a guide, not legal advice. Contracts can give more than the legal minimum, and special cases (part-time work, free zones, disputes) can change the figure, so confirm the final amount with your HR team or a lawyer before paying or accepting a settlement.
Sources
Questions people ask
How is gratuity calculated in Pakistan?
Do I get gratuity if I resign in Pakistan?
Is gratuity paid on basic or gross salary?
Is gratuity paid if my company has a provident fund?
Is EOBI the same as gratuity?
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