Government Pension & Commutation Calculator — Pakistan 2026
Federal government pension in Pakistan: gross pension at 7/300 per year on the 24-month average pay (max 70%), the 35% commutation lump sum using the Finance Division factor for your age, net monthly pension with medical allowance, and the voluntary-retirement reduction.
| Qualifying service counted | — |
|---|---|
| Gross pension | — |
| Voluntary-retirement reduction | — |
| Commuted portion | — |
| Commutation factor | — |
| Lump sum (commuted value) | — |
| Net monthly pension | — |
| Medical allowance | — |
| Monthly take-home in retirement | — |
| Years to recover the lump sum | — |
In short
A federal government pension in Pakistan equals average pay of the last 24 months × 7/300 × years of service, capped at 30 years (70%); up to 35% can be commuted for a lump sum of commuted pension × 12 × the age factor (12.3719 at 60). On PKR 150,000 average pay with 30 years the gross pension is PKR 105,000, the lump sum about PKR 5.46 million and the net pension PKR 68,250 a month plus medical allowance.
Who this is for: Federal (and, approximately, provincial) government employees nearing retirement, and families estimating pension and the commutation lump sum.
How a Pakistani government pension is calculated
Federal civil servants on the defined-benefit scheme (appointed before 1 July 2024) earn 7/300 of pensionable pay per year of qualifying service — 2.33% a year, reaching the 70% maximum at 30 years. Since 1 January 2025 pensionable pay is the average of the last 24 months of emoluments (basic pay, personal pay, special pay, any increment due in the retirement year) rather than the last pay drawn; ad-hoc relief allowances are excluded.
- Commutation: up to 35% of gross pension can be exchanged for a lump sum = commuted monthly pension × 12 × the factor for your age next birthday (12.3719 at 60, 15.1478 at 55). The surrendered portion is restored after the commutation period.
- Voluntary retirement after 25 years is allowed, but since September 2024 the pension is reduced by 3% for each year before superannuation, up to 20%.
- Medical allowance of 25% (up to BPS-15) or 20% (BPS-16 and above) of net pension and the annual pension increase announced in the budget are paid on top.
- Contributory scheme: new entrants from 1 July 2024 (armed forces from 1 July 2025) pay 10% of basic with a 20% government contribution into an individual fund instead.
- Family pension is 75% of the net pension for the spouse (and dependent children), with a minimum pension set each year.
See also: EOBI Pension Calculator — Pakistan, National Savings Profit Calculator — Pakistan.
Assumptions
- Gross = average pay × 7/300 × qualifying years (rounded, max 30); voluntary retirement reduction 3% per year short of superannuation (max 20%).
- Commuted pension = gross × commutation % (max 35); lump sum = commuted × 12 × factor for age next birthday (published table points; interpolated between them and flagged).
- Net = gross − commuted; medical allowance = entered % of net; recovery years = lump sum ÷ annual commuted pension.
Worked example
Gross pension = 150,000 × 7/300 × 30 = PKR 105,000 a month (70%). Commute 35% = PKR 36,750 → lump sum 36,750 × 12 × 12.3719 = PKR 5,456,008. Net pension PKR 68,250 a month, plus 20% medical allowance PKR 13,650 = PKR 81,900 a month before annual increases. Retiring voluntarily 3 years early would cut the gross pension by 9% to PKR 95,550.
Frequently asked questions
How is pension calculated for government employees in Pakistan?
Gross pension = average pay of the last 24 months × 7/300 × years of qualifying service (max 30, i.e. 70%); up to 35% can be commuted for a lump sum using the age-based commutation factor, and the rest is paid monthly with medical allowance and annual increases.
What is the commutation factor at age 60?
12.3719 on the Finance Division table (age next birthday 60) — PKR 36,750 of commuted monthly pension yields a lump sum of about PKR 5.46 million.
Is pension calculated on last pay or average pay?
On the average of the last 24 months' pensionable emoluments for federal retirements from 1 January 2025, with the increment due in the retirement year added; before that it was the last pay drawn.
What is the minimum service for a government pension?
10 years of qualifying service (25 for voluntary retirement); 5–10 years earns a one-off gratuity instead.
Is government pension taxable in Pakistan?
Pension received from a former employer is exempt from income tax (except where the person continues to work for the same employer); the commuted lump sum and gratuity are also exempt.
Do new government employees get a pension?
Employees appointed on or after 1 July 2024 are under the Contributory Pension Fund (10% employee + 20% government of basic pay) — a defined-contribution balance rather than the 70% formula.
How much is family pension?
Generally 75% of the net pension the retiree was drawing (or would have drawn), payable to the spouse for life and to dependent children up to the prescribed age.
Is the commuted portion ever restored?
Yes — on the federal scheme the commuted part of the pension is restored after the number of years covered by the commutation factor, at the age the table assumed.
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