How each law turns years of service into a gratuity sum
Gratuity is a lump sum paid at the end of service, worked out as a number of days' or months' wages for each year served. The amount per year and the way a part year counts depend on the law or service rule that covers you. This calculator counts your service between two dates, applies the six-month rule where that law has one, and multiplies by the per-year amount of the rule you choose.
Each rule sets what one year earns and how a part year counts. Punjab, Islamabad and KP give 30 days' wages a year, Sindh one month's and Balochistan two months'; all count a part year of more than six months as a year. Federal service of five to under ten years earns one month's emoluments per completed year, and India gives monthly wages ÷ 26 × 15 a year.
One block per counted year, with the part year marked, shows exactly why your service earns the gratuity shown.
How the governing rule, last wages and service dates set gratuity
The rule you pick fixes both the amount earned per year and whether a part year can round up. The dates then decide how many years count.
- Rule that applies
- The choice changes the per-year amount and the rounding. For Rs 80,000 and 8 years 7 months, Punjab, Islamabad, KP and Sindh give Rs 720,000, Balochistan Rs 1,440,000, and federal service Rs 640,000 because it counts completed years only; India's option gives ₹415,385. Choose the law of the province where the establishment is, not where you live.
- Last month's wages
- Gratuity is a straight multiple of this figure, so Rs 5,000 more in monthly wages adds Rs 45,000 to a nine-year award. Use wages for the last month of service; a piece-rated worker under the Standing Orders uses the highest monthly pay in the last 12 months. For India the tool divides by 26 before multiplying by 15.
- First day and last working day
- Both dates are counted, so service ending the day before an anniversary completes that year. One day can decide the part year: from 1 March 2018, a last day of 31 August 2026 gives exactly 8 years 6 months and Rs 640,000, while 1 September 2026 adds a day and gives Rs 720,000.
- Federal and Indian service limits
- The federal option covers only five to under ten years. It refuses fewer than five completed years, and it also refuses 9 years 6 months or more, because that service counts as 10 years for pension and belongs in the Pension Calculator. India's option refuses service under five years.
Steps
- Choose the law or service rule that covers your job.
- Enter your last month's wages, or emoluments for government service.
- Enter your first day of service and last working day, then calculate.
Reading tip: Use the wages in your last month of service. Service is counted between your two dates with both days included, so a full year ending the day before an anniversary counts as a complete year.
Final-settlement checks a gratuity figure supports
Check a final settlement
Compare an employer's gratuity figure with the amount under your province's law.
Plan a job change
See how many more months push a part year past six months and add a year of gratuity.
Short government service
Work out the service gratuity for five to under ten years of federal service.
Compare provinces
See the difference between one and two months' wages a year under Sindh and Balochistan laws.
How the calculation works
- Y
- Years of service counted by the rule; federal service gratuity counts completed years only.
- wages
- Wages admissible in the last month of service, or emoluments for government service.
- part year
- The months and days left after completed years; it adds a year only when more than six months.
- 26
- India's statutory divisor that turns monthly wages into a daily wage before multiplying by 15 days.
Choose the rule that covers your employer. Coverage, exclusions and provident-fund alternatives are explained below.
What every part means
- Y
- Years of service counted by the rule; federal service gratuity counts completed years only.
- wages
- Wages admissible in the last month of service, or emoluments for government service.
- part year
- The months and days left after completed years; it adds a year only when more than six months.
- 26
- India's statutory divisor that turns monthly wages into a daily wage before multiplying by 15 days.
Calculate it step by step
The last working day is included in service.
Federal service gratuity counts completed years only.
Per-year amount: one month's wages, two months' wages, one month's emoluments, or wages ÷ 26 × 15 for India.
The wording comes from Standing Order 12(6) of the 1968 Ordinance, Standing Order 16(6) of the Sindh Act 2015, clause 17(6) of the KP Act 2013, Standing Order 17(1) of the Balochistan Act 2021, CSR Article 474-B(a) for federal service, and section 53 of India's Code on Social Security 2020. The Balochistan text is taken from the Assembly's notification of 14 June 2021. Treating 30 days' wages as one month's wages is Calculation Guide's convention.
See how Calculation Guide tests examples and handles calculation limits.
See it in practice
- Rule that applies to you
- Private sector: Punjab, Islamabad or KP (30 days' wages a year)
- Last month's wages
- 80000 per month
- First day of service
- 2018-03-01
- Last working day
- 2026-09-30
1 March 2018 to 30 September 2026 = 8 years, 7 months. Seven months is more than six, so Y = 9. Gratuity = 9 × Rs 80,000 = Rs 720,000.
- Service length8 years, 7 months, 0 days
- Years counted9
Interpretation & limitations
How to read your result
Example: a worker in Punjab earning Rs 80,000 a month serves from 1 March 2018 to 30 September 2026, which is 8 years and 7 months. The seven-month part is more than six months, so 9 years count. Gratuity is 9 × Rs 80,000 = Rs 720,000. The same dates in Sindh give the same amount; in Balochistan, two months a year doubles it.
Where this estimate stops
Coverage depends on the law: the Standing Orders apply to establishments above a minimum size, small industrial units can be excluded, and dismissal for misconduct can remove the right. A provident fund or approved pension fund can replace gratuity. Punjab's Labour Code 2026 may change the rule once in force, and India's gratuity is subject to a ceiling. Check your contract and the current law.
Frequently asked questions
01Is 30 days' wages the same as one month's salary?
Calculation Guide treats 30 days' wages as one month's wages for a monthly-paid worker. Some employers work out a daily wage on a different number of days, so check your employer's practice or a labour court decision if the difference matters.
02Do I get gratuity if my employer has a provident fund?
Under the 1968 Standing Orders, gratuity is not payable for the period an employer runs a provident fund with an employer contribution at least equal to yours, or an approved pension fund. Sindh and KP require the fund benefit to be no less than the gratuity.
03Do I get gratuity if I resign?
Under the 1968 Standing Orders, gratuity is payable when a worker resigns or is terminated for any reason other than misconduct, subject to the establishment being covered.
04How is a part year counted?
In the private-sector laws and in India, a part year of more than six months counts as a full year. In the example, 8 years and 7 months count as 9 years.
05What happens if the worker dies in service?
Under the Standing Orders the gratuity goes to the dependants. For federal service under 10 years, the gratuity on death is one and a half months' emoluments per completed year, shown in the result.
06Is there a minimum service for gratuity in India?
Yes. Five years of continuous service is needed, except on death or disablement; fixed-term employees qualify after one year under the Code.
Sources & references
- Pakistan Code: Industrial and Commercial Employment (Standing Orders) Ordinance 1968 ↗
- Sindh Code: Sindh Terms of Employment (Standing Orders) Act 2015 ↗
- KP Code: Industrial and Commercial Employment (Standing Orders) Act 2013 ↗
- Finance Division: Compendium of Pension Rules 2018 (CSR Articles 14, 474-B) ↗
- India Ministry of Labour: FAQs on the labour codes (gratuity) ↗