Gratuity Calculation Formula In Excel Pakistan Updated -

Calculating gratuity (often referred to as a "severance fund" or "gratuity fund") is a critical compliance requirement for businesses operating in Pakistan. Whether you are an HR manager, an accountant, or a business owner, ensuring that your employees receive the correct end-of-service benefits is not just a legal obligation under the , but also a moral imperative.

Create a new Excel workbook. Label the columns as follows (recommended for Pakistani payroll): gratuity calculation formula in excel pakistan

If the employee worked 5 years and 8 months, both formulas return 5 (since Pakistani law typically requires full years; fractional years often do not count unless policy states otherwise). Calculating gratuity (often referred to as a "severance

Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 Label the columns as follows (recommended for Pakistani

Companies must accrue gratuity monthly as a liability. Use Excel to forecast.

You cannot simply subtract the years manually because employees often work partial years (e.g., 5 years and 7 months). In Pakistan, gratuity is typically payable only for . Partial years (e.g., the 7 months in the example above) are usually not counted, though some generous companies may pro-rate them.