Build a sample settlement
Pro-rated salary, leave encashment, gratuity and notice, then the recoveries. Illustrative only.
Pay and last month
Basic plus fixed allowances, the figure you pro-rate.
Used for leave encashment and for gratuity (30 days' wages per year).
Use 30 if your policy ignores the calendar.
Leave, service and notice
More than 6 months rounds the year up for gratuity.
Recoveries
Type the recomputed annual difference. This tool does not guess a slab for a lump sum.
Illustrative settlement
- Salary for days workedRs. 96,774
- Leave encashmentRs. 40,000
- Gratuity (5 years)Rs. 500,000
- Notice payRs. 0
- Gross payableRs. 636,774
- Advances and loans− Rs. 25,000
- Unreturned assets− Rs. 0
- Notice shortfall− Rs. 0
- Income tax− Rs. 0
- Total recoveredRs. 25,000
- 1Salary = gross ÷ days in month × days worked
- 2Leave = unused days × (basic or gross ÷ 30)
- 3Gratuity = basic × years, rounding up after 6 months
- 4Net = those lines + notice pay − advances, assets and tax
How the settlement is added up
Salary for the final month is gross pay divided by the days in that month, multiplied by days worked. Leave encashment is the unused annual-leave balance times basic (or gross) divided by 30. Gratuity, when you leave it on, is one month of basic for each completed year, and a part year of more than six months counts as a full year. Notice uses the same daily rate as salary: the gap is paid if the employer ended the job, and recovered if the employee left short.
Provident fund is not in this total. Trustees pay the fund balance under the scheme rules, and an approved fund often stands in place of statutory gratuity. Switch gratuity off in that case rather than paying both. The walkthrough, including what this arithmetic does not decide, is in the final settlement guide.
The same example, in the form
The form opens on an accounts officer in Lahore: gross Rs. 150,000, basic Rs. 100,000, 20 days worked in a 31-day month, 12 days of annual leave, 4 years and 8 months of service, notice fully served, and a Rs. 25,000 advance. Salary is Rs. 96,774, leave is Rs. 40,000, gratuity rounds to 5 years and Rs. 500,000, and the net before tax is Rs. 611,774. Type the recomputed tax when you have it. The salary tax calculator is the monthly slab; a lump sum still needs the year recomputed.
These rupees are a model of the inputs, not a ruling under the Standing Orders Ordinance 1968 or a provincial labour law. Check the statute and the contract that cover the establishment before anyone is paid. When the same numbers should come off the employee record instead of a form, see payroll software for Pakistan. Gratuity on its own is the gratuity guide and the gratuity calculator.
Final settlement questions
Pro-rated salary for days worked, encashment of unused annual leave, gratuity at 30 days of basic per completed year, notice pay or notice shortfall, then advances, unreturned assets and an income-tax amount you type in.
Completed years are counted as entered. If the extra months in the final year are more than six, that year is rounded up. Turn gratuity off when an approved provident fund replaces it.
A lump sum changes annual taxable income. The right withholding is the difference after you recompute the year, not a flat rate on the settlement. Use the salary tax calculator for the monthly slab, then type the extra tax here.
No. It is general guidance so HR can see the arithmetic. Gratuity, leave encashment and the deadline to pay depend on the Standing Orders or provincial labour law that covers the establishment, and on the contract. Confirm those before you pay.
Run this in live payroll, not a spreadsheet
StreamHCM applies the same FBR slabs, attendance rules, EOBI and expense-claim logic across every employee, then generates the payslip.