What is the law of gratuity in Pakistan?

In accordance with the provisions of law, rate of gratuity is “thirty (30) days wages for every completed year of service or any period in excess of six months”. Any employment period exceeding six months will be considered as one year. Originally, gratuity was set at 15 days’ wages for every completed year of service.

When can employer refuse to pay gratuity?

If an employer fails to pay gratuity amount along with interest 30 days after the controlling authority has directed it to do so, the appropriate government, be it Central Government or State Government, whoever is concerned with the employing organization, will authorize the controlling authority to start prosecution …

How is gratuity calculated in Pakistan?

It is calculated according to this formula: Last drawn salary (basic salary plus dearness allowance) X number of completed years of service X 15/26. According to this formula, the time period of over six months or more is considered as one year.

What employees qualify for gratuity?

To be eligible for gratuity under the Gratuity Act, an employee needs to have at least five full years of service with the current employer, except in the event that an employee passes away or is rendered disabled due to accident or illness. In these cases, gratuity must be paid.

What is the new law about gratuity?

“ The proposed code on social security, 2020, has extended the benefit of gratuity to fixed-term employees, irrespective of the duration of their employment, making it mandatory on employers to disburse gratuity amounts to fixed-term employees even if they are employed for less than five years,” said Pathak.

Is it compulsory to pay gratuity?

As per the government laws, it is mandatory for employers to pay the amount of gratuity within 30 days. However, if there is a delay in the payment of the gratuity, then the employer has to pay simple interest on this amount from the due date till the date of payment.

What is Rule for gratuity?

The gratuity rules are mandated under the Payment of Gratuity Act, 1972….What is the Rule of Gratuity?

Organisation type	Gratuity tax implications
Covered under the act	Not applicable up to least of the following: Rs. 20 Lakh. Actual gratuity received. 15 x last drawn salary x number of completed years of service) / 26

What is the law of gratuity in Pakistan? In accordance with the provisions of law, rate of gratuity is “thirty (30) days wages for every completed year of service or any period in excess of six months”. Any employment period exceeding six months will be considered as one year. Originally, gratuity was set at 15…