On this page 11 sections
- Government Pension at a Glance
- Who Gets a Government Pension in Pakistan
- The Pension Formula
- How to Calculate Your Pension in 3 Steps
- Worked Examples
- What Is Commutation?
- Pension Increases and Medical Allowance
- Family Pension
- How to Claim Your Government Pension in Pakistan
- Mistakes to Avoid
- Frequently Asked Questions
A government pension in Pakistan is 7/300 of your average emoluments over the last 24 months for each year of qualifying service, up to a maximum of 70% after 30 years. You can also take up to 35% of it as a lump sum at retirement, through commutation, and the rest is paid monthly for life.
Here is the current formula, what counts as emoluments, worked examples, commutation, family pension, and how to claim. It covers government employees on the old defined-benefit pension, appointed before 1 July 2024. New entrants from 1 July 2024 are under the Contributory Pension Fund Scheme, which is a different system. Private-sector employees are not covered by this pension. They build their pension through EOBI. Our EOBI pension guide explains registration, eligibility and the Rs 11,500 minimum pension.
Government Pension at a Glance#
| Item | Detail |
|---|---|
| Formula | Gross pension = average emoluments (last 24 months) x 7 x service years / 300 |
| Maximum | 70% of emoluments after 30 years of service |
| Minimum service | 10 years of qualifying service |
| Retirement age | 60 years (superannuation) |
| Commutation | Up to 35% of gross pension as a lump sum |
| Who it covers | Civil servants appointed before 1 July 2024 |
| Sanctioned by | AGPR through a Pension Payment Order (PPO) |
Who Gets a Government Pension in Pakistan#
You need at least 10 years of qualifying service to get a pension. Less than that, and there is no monthly pension.
The normal retirement age is 60. That is superannuation. You can also retire earlier, but retiring before 60 reduces the gross pension, roughly 3% for every year short of 60, up to a maximum reduction of 20%. The accounts office applies the reduction.
The old pension covers civil servants appointed on a regular basis before 1 July 2024. Anyone appointed on or after 1 July 2024 is under the Contributory Pension Fund Scheme, where the pension depends on contributions, not on this formula.
Your GP Fund is separate from your pension. The GP Fund is a lump sum of your own savings plus mark-up, paid at retirement. The pension is a monthly payment for life. Our GP Fund guide explains the deduction rates and the 12.05% mark-up rate.
The Pension Formula#
Gross pension = (average emoluments of the last 24 months x 7 x qualifying service) / 300. That is 7/300 of your emoluments for each year of service. At 30 years, 30 x 7 / 300 = 70%, which is the maximum.
Emoluments are the average of your basic pay plus pensionable allowances over the last 24 months of service. Pensionable allowances include Special Pay, Personal Pay and Qualification Pay. This changed on 1 January 2025 (Finance Division O.M. F.No.9(3)R-6/2024-401). Before that, pension was worked out on the last pay drawn. Any calculator or guide that still uses last pay is out of date.
Your basic pay comes from your BPS scale. Our BPS pay scale chart 2026 gives the minimum and maximum basic pay for every scale from BPS-1 to BPS-22.
Qualifying service is counted in whole years. A remaining part of 6 months or more counts as a full year (CSR 423), and no more than 30 years count. If you retire between July and November, a retiring-year increment is added if due.
How to Calculate Your Pension in 3 Steps#
Step 1: work out your average emoluments. Take your basic pay plus pensionable allowances for each of the last 24 months and average them.
Step 2: count your qualifying service. Count whole years, round a remaining 6 months or more up to a full year, and cap the total at 30 years.
Step 3: apply the formula. Multiply average emoluments by 7 and by your service years, then divide by 300. That is your gross monthly pension. Commutation and the net pension come after that.
Worked Examples#
| Average emoluments | Service | Gross pension | Commuted 35% | Net pension | Lump sum at 60 |
|---|---|---|---|---|---|
| Rs 150,000 | 30 years | Rs 105,000 | Rs 36,750 | Rs 68,250 | Rs 5,456,008 |
| Rs 110,000 | 25 years | Rs 64,167 | Rs 22,458 | Rs 41,708 | Rs 3,334,227 |
| Rs 80,000 | 20 years | Rs 37,333 | Rs 13,067 | Rs 24,267 | Rs 1,939,914 |
Example: Rs 150,000 emoluments, 30 years. Gross pension is 150,000 x 30 x 7 / 300 = Rs 105,000 a month. Commuting 35% gives Rs 36,750 a month, so the net pension is Rs 68,250 a month. The lump sum at age 60 is 36,750 x 12 x 12.3719 = Rs 5,456,008.
BPS-17 example: Rs 110,000 emoluments, 25 years. Gross pension is 110,000 x 25 x 7 / 300 = Rs 64,167 a month. Commuting 35% gives Rs 22,458 a month, so the net pension is Rs 41,708 a month. The lump sum at age 60 is Rs 3,334,227. The BPS-17 pay breakdown shows the full basic pay, allowances and gross salary for that grade.
What Is Commutation?#
Commutation means giving up part of your monthly pension in return for a lump sum at retirement. You can commute up to 35% of your gross pension. The remaining 65% is your net pension, paid monthly for life.
Lump sum = commuted monthly amount x 12 x the commutation factor for your age. The factor comes from the official commutation table (Annex-II to Finance Division O.M. of 4 September 2001, corrected 30 January 2002). The younger you are at retirement, the higher the factor, because the government is buying out more years of payments.
| Age next birthday | Commutation factor |
|---|---|
| 55 | 15.1478 |
| 56 | 14.5602 |
| 57 | 13.9888 |
| 58 | 13.4340 |
| 59 | 12.8953 |
| 60 | 12.3719 |
| 61 | 11.8632 |
| 62 | 11.3684 |
| 63 | 10.8872 |
| 64 | 10.4191 |
| 65 | 9.9639 |
Use your age next birthday, not your current age. The factor is looked up by the age you will turn next. At superannuation at 60, the factor is 12.3719. The table runs from age 20 (factor 40.5043) to age 80 (factor 4.6321).
The commuted portion is restored. After the commutation period, typically 12 to 15 years depending on the age factor, the surrendered 35% is added back to your monthly pension.
Commutation is your choice. You can commute less than 35%, or nothing at all, and keep the full gross pension as your monthly payment.
Pension Increases and Medical Allowance#
Pensions rose 7% in Budget 2026-27, effective from the July 2026 pension payment. Earlier increases were 15% in 2011, 7.5% in 2015, 15% in 2022, 17.5% in 2023, 15% in 2024 and 7% in 2025.
Medical allowance is 25% of the net pension for BPS-1 to BPS-15, and 20% for BPS-16 to BPS-22. It is worked out on the net (65%) pension before ad-hoc increases are applied.
Family Pension#
Family pension is the monthly benefit paid to eligible dependents after a government employee or pensioner passes away, whether the death happens during service or after retirement. It is not inheritance and does not follow inheritance shares.
Federal rules: the pension goes first to the widow or widower, then to eligible children, generally up to age 21. Where more than one widow survives, the pension is divided equally among them. A widow’s pension ceases on remarriage.
Punjab’s rules changed twice in two years. A 10-year cap on family pension was introduced in December 2024, then lifetime family pension for the spouse was restored in August 2025, effective from 2 December 2024. In October 2026 the Lahore High Court struck down the restrictions that excluded widowed, divorced and unmarried daughters.
Khyber Pakhtunkhwa’s published practice is different again. On death in service, the family gets 25% of the gross pension as gratuity plus 75% of the gross pension monthly. On death after retirement, the family gets 100% of the net pension the deceased was drawing. Any pension the pensioner could not draw is paid to the family as Life Time Arrears.
No succession certificate is needed for family pension. The Finance Division clarified this on 15 October 2026, confirming its earlier letter of 17 December 2019. Family pension depends on eligibility under the pension rules, not on a court-issued succession certificate.
Federal and provincial rules differ, so confirm the current policy with the accounts office that handles your department before submitting a claim.
How to Claim Your Government Pension in Pakistan#
Your department prepares the pension case. It collects your service record, pay history and the pension forms, and sends the case to the accounts office.
AGPR sanctions the pension and issues the Pension Payment Order (PPO). The PPO is the document that fixes your pension. Your actual sanctioned pension is determined by the PPO, not by any calculator.
The pension is paid through your bank. Once the PPO is issued, the monthly pension is credited to your bank account, and the commutation lump sum is paid with it.
Check the PPO against your own calculation. If the figures differ from the formula in this guide, ask the accounts office to explain the difference before you accept it.
Mistakes to Avoid#
Using your last pay. Since 1 January 2025, pension is worked out on the average of the last 24 months, not the last pay drawn. Any guide or calculator still using last pay is out of date.
Using the 25% commutation limit. The limit is 35%, set in 2005. The 25% figure is the pre-2005 rule.
Do not look up the factor by your current age. The commutation table uses your age next birthday. Using the wrong age can overstate your lump sum by several hundred thousand rupees.
Do not count more than 30 years. Service beyond 30 years does not raise the pension. The maximum is 70% of emoluments.
Do not assume Punjab’s old 10-year family pension cap still applies. Lifetime family pension for the spouse was restored in August 2025.
Do not treat a calculator result as your sanctioned pension. The PPO issued through your department and AGPR is the only final figure. The official rules are on the Finance Division website.
Frequently Asked Questions#
How is pension calculated in Pakistan?
Gross pension = (average emoluments of the last 24 months x 7 x qualifying service years) / 300, capped at 30 years, which gives a maximum of 70% of emoluments. Emoluments are the average of basic pay plus pensionable allowances over the last 24 months. For example, average emoluments of Rs 150,000 with 30 years of service give a gross pension of Rs 105,000 a month.
What is commutation?
Commutation means giving up part of your monthly pension in return for a lump sum at retirement. You can commute up to 35% of your gross pension. The lump sum is the commuted monthly amount x 12 x the commutation factor for your age next birthday (12.3719 at age 60). The remaining 65% is paid monthly for life, and the commuted portion is restored after the commutation period, typically 12 to 15 years.
Who is eligible for government pension?
A civil servant appointed on a regular basis before 1 July 2024, with at least 10 years of qualifying service. The normal retirement age is 60. Anyone appointed on or after 1 July 2024 is under the Contributory Pension Fund Scheme, not the old defined-benefit pension.
What is family pension?
Family pension is the monthly benefit paid to eligible dependents after a government employee or pensioner passes away. Under federal rules it goes first to the widow or widower, then to eligible children, generally up to age 21. Where more than one widow survives, it is divided equally. No succession certificate is required for family pension. Federal and provincial rules differ, so confirm the current policy with your accounts office.
When is the commuted portion of pension restored?
After the commutation period, typically 12 to 15 years depending on the age factor applied at retirement. Once the period ends, the surrendered portion is added back to your monthly pension.
