Gratuity in Pakistan is not one rule. A factory worker in Lahore, a shop employee in Karachi and a federal clerk who leaves after eight years each get a lump sum built the same basic way, years × wages for one year, but each law counts the years and sizes the year differently. The table below sets the regimes side by side as Calculation Guide's Gratuity Calculator implements them.
The regimes side by side
| Regime | Law | One year earns | Part year |
|---|---|---|---|
| Punjab and Islamabad private sector | Standing Order 12(6), 1968 Ordinance | 30 days' wages | Counts as a year if more than six months |
| Khyber Pakhtunkhwa private sector | Clause 17(6), KP Act 2013 | 30 days' wages | Counts if more than six months |
| Sindh private sector | Standing Order 16(6), Sindh Act 2015 | One month's wages | Counts if more than six months |
| Balochistan private sector | Standing Order 17(1), Balochistan Act 2021 | Two months' wages | Counts if more than six months |
| Federal government servant, 5 to under 10 years | CSR Article 474-B(a) | One month's emoluments | Ignored: completed years only |
Calculation Guide treats 30 days' wages as one month's wages for a monthly-paid worker, so Punjab, Islamabad, KP and Sindh give the same figure in practice. Under the 1968 Standing Orders, a piece-rated worker's wage is the highest monthly pay in the last 12 months.
One worker, four answers
Take last month's wages of Rs 80,000 and service from 1 March 2018 to 30 September 2026. Counting both days, that is 8 years, 7 months and 0 days. Seven months is more than six, so every private-sector regime counts 9 years. The federal rule counts the 8 completed years only.
| Regime | Years counted | Per year | Gratuity |
|---|---|---|---|
| Punjab, Islamabad or KP | 9 | Rs 80,000 | Rs 720,000 |
| Sindh | 9 | Rs 80,000 | Rs 720,000 |
| Balochistan | 9 | Rs 160,000 | Rs 1,440,000 |
| Federal service | 8 | Rs 80,000 | Rs 640,000 (Rs 960,000 on death in service) |
The federal death-in-service figure uses one and a half months' emoluments per completed year: 8 × 1.5 × 80,000 = Rs 960,000.
Gratuity CalculatorChoose the rule that covers your job, enter last month's wages and your service dates, and see the years counted.The six-month edge, day by day
The private-sector laws say a part year counts when it is more than six months. Exactly six months is not enough; one more day is. The federal rule ignores part years for gratuity, yet the pension rules count six months or more as a year, which creates a separate line at 9 years 6 months.
| Last working day | Service | Punjab Standing Orders | Federal service |
|---|---|---|---|
| 31 August 2023 | 5 years 6 months 0 days | 5 years: Rs 400,000 | 5 years: Rs 400,000 |
| 1 September 2023 | 5 years 6 months 1 day | 6 years: Rs 480,000 | 5 years: Rs 400,000 |
| 30 August 2027 | 9 years 5 months 30 days | 9 years: Rs 720,000 | 9 years: Rs 720,000 |
| 31 August 2027 | 9 years 6 months 0 days | 9 years: Rs 720,000 | Counts as 10 years: pension, Rs 18,667 a month gross at Rs 80,000 emoluments |
| 1 September 2027 | 9 years 6 months 1 day | 10 years: Rs 800,000 | Pension, as above |
For a private-sector worker planning a resignation, one day can move the payout by a full month's wages. For a federal employee, 9 years 6 months is the point where a one-time gratuity gives way to a monthly pension for life; how that pension is worked out is in the federal 7/300 pension formula, and how service dates are counted is in superannuation date and qualifying service.
Pension CalculatorAt 9 years 6 months or more of federal service, estimate the monthly pension instead.Checking an employer's final settlement
- Count service from your first day to your last working day, including both, and write it as years, months and days.
- Apply your regime's part-year rule: under the Standing Orders, add a year only if the leftover is more than six months; under the federal rule, drop the leftover.
- Multiply the years by one year's amount from the table above, using the wages of your last month of service.
- If the employer's figure is lower, ask which step differs: the dates, the part year, the wage used, or a provident fund said to replace gratuity.
When the Standing Orders do not apply
The amount is only half the question; the other half is whether the law covers you. The Standing Orders apply to covered establishments, generally above a minimum number of workers, and some small industrial units are excluded. Dismissal for misconduct can remove the right. Under the 1968 Ordinance, no gratuity is due for a period in which the employer runs a provident fund with an employer contribution at least equal to the worker's, or an approved pension fund; the Sindh and KP laws require the fund benefit to be no less than the gratuity.
What this comparison does not cover
- Contract terms more generous than the law, which an employer may owe on top of the statutory minimum.
- Which allowances count as wages under each law; check the statute's definition and your contract.
- Punjab's Labour Code 2026, which may change the rule once in force.
- Federal invalidation and death cases beyond the death-in-service gratuity shown, and provincial government service rules.
The calculator also offers India's 15 days' wages a year under the Code on Social Security 2020, for readers comparing across the border; it is not part of the Pakistani regimes above.