Pension Calculator

Last updated: 13 October 2026

Monthly pension versus commutation

A monthly pension is the recurring amount. Commutation is the choice, where the rules allow it, to give up a slice of that monthly amount in exchange for a lump sum. This page keeps those two ideas apart. It first works out a gross monthly pension from the pay and service you enter. It then splits that gross figure by the commutation percent you type. The monthly amount left is gross minus the commuted slice. The lump-sum estimate is the commuted monthly slice multiplied by the commutation months you type.

Nothing on this form is a commutation table from a government notification. The pension rate, the commutation percent, the qualifying years and the commutation months are inputs. The form may show starting numbers so it is not blank. Replace them with the figures your pension office uses. If you do not commute, set the commutation percent to zero and the monthly result stays at the gross pension.

How years of service change the pension

The service factor is your years of service divided by the qualifying years, and it never goes above 1. If you have served the full qualifying period or more, the factor is 1 and service does not increase the pension any further inside this formula. If you have served less, the gross pension is scaled down. For example, 15 years against a qualifying period of 30 years is a factor of one half, so the gross monthly pension is half of what full service would produce at the same pay and rate.

Gross monthly pension equals (last basic pay + allowances) times the pension rate percent, times the service factor. Allowances belong in the box only when your rules include them in pensionable pay. Leaving a non-pensionable allowance in that box makes the estimate too high.

A worked pension commutation calculator example

These are typed inputs, not a legal scale. Last basic pay PKR 60,000, allowances zero, 30 years of service, qualifying years 30, pension rate 70, commutation 25 percent, commutation months 12. The service factor is 1. Gross monthly pension is PKR 42,000. The commuted slice is 25 percent of that, PKR 10,500 a month. Monthly pension after commutation is PKR 31,500. The lump-sum estimate is PKR 10,500 times 12, which is PKR 1,26,000.

Gross here means the monthly pension before commutation. The page does not subtract income tax, a pension contribution, or a commuted-value factor from a gazette. “Net” in ordinary speech is often the amount after commutation and after tax. This tool only shows the amount after commutation. Ask the pension office for the net payable.

Mistakes to avoid

If your office uses a commutation factor that depends on age, this form cannot see that factor. Put the months or the percent your office already calculated, or treat the lump sum as a rough sketch only.

• Treating the sample 70 percent rate or the sample 25 percent commutation as the rate in your rules.
• Entering total service when the rules count only qualifying service.
• Putting gross salary, including non-pensionable allowances, in the basic pay box.
• Reading the lump sum as twelve months of the full pension. It is twelve months of the commuted slice only, when months are set to 12.

Limitations

Pension and commutation rules differ by service, statute and date of retirement. This is not an official government calculator and not legal or financial advice. Check the latest pension notification from the Finance Division or your pension sanctioning authority before you make a decision.

Sources

Official pages to confirm figures before you rely on them. This calculator is not those offices.

• Finance Division, Government of Pakistan
• Federal Board of Revenue

Frequently asked questions