Employer of Record in Pakistan

The EOBI employer contribution of 5% of the minimum wage is federal and applies to all eligible workers. Punjab employers also pay PESSI contributions and Sindh employers pay SESSI contributions. These provincial rates are not capped at a fixed national figure and vary. Teamed's Pakistan fee sits on top of your employee's salary, not on top of the statutory contributions.

Teamed's Pakistan price is a starting rate, with zero FX in any currency pairing. No setup fees. No exit fees. Salaries, taxes, and benefits passed through at cost on every invoice.

The full breakdown, with worked examples at current statutory rates, is in the cost guide.

Registering a Pakistani private limited company requires SECP registration, a memorandum and articles of association, and ongoing filing obligations under the Companies Act, 2017. An Employer of Record is faster and cheaper at low headcount. Teamed runs Pakistan payroll, contracts, and labour law compliance from day one.

The crossover point depends on Pakistani salary levels and your in-country accounting costs. A higher salary rarely shifts that point much, because it lifts the EOR fee and your own entity costs together. The EOR vs entity guide runs those numbers for Pakistan.

Most EOR providers will not tell you when you have crossed it. We do, and we help you move. You progress from contractor to EOR to your own Pakistan entity on one platform under Teamed's Graduation Model, with tenure preserved.

The federal minimum wage is set by the Minimum Wages Ordinance, 1961, and raised to PKR 40,700 per month effective 1 July 2026 under the Finance Act 2026. Punjab employers must pay the higher provincial rate, which rose from July 2025. Maximum working hours are 48 hours per week under the Factories Act, 1934. Employers must record working time.

The Maternity and Paternity Leave Act, 2023 is current federal law, but it applies only to federal-government-administered establishments. For that population, maternity leave runs approximately six months (25.71 weeks) for the first birth and paternity leave is 30 days fully paid for the first three children. Most private-sector employees are covered by shorter provincial maternity law instead (16 weeks in Sindh, 12 weeks elsewhere) with no general paternity leave entitlement. The hiring guide covers the day-one contract obligations and the probation rules in full.

Statutory annual leave is 14 days a year under the Factories Act, 1934. Leave accrues after 12 months of continuous service. Casual leave is 10 days per year at full pay. Sick leave depends on the applicable statute: 8 days a year under the Shops and Establishments Ordinance for most office roles, or 16 to 20 days under the Factories Act for factory-sector roles, by province. There are 11 federal gazetted public holidays.

Maternity leave under the 2023 Act is approximately six months fully paid for the first birth, reducing for subsequent children, but only for federal-government establishments. Paternity leave of 30 days fully paid for the first three children under the same Act is also federal-only. Most private-sector employers are covered by provincial maternity law instead (16 weeks in Sindh, 12 weeks in Punjab, Khyber Pakhtunkhwa, Balochistan, and the Islamabad Capital Territory) with no general statutory paternity leave. The benefits guide covers each entitlement and the qualifying service rules.

EOBI (Employees Old-Age Benefits Institution) employer contribution is 5% of the minimum wage per eligible employee per month. Employee EOBI is 1% of the minimum wage. Punjab employers also pay PESSI contributions and Sindh employers pay SESSI contributions at provincial rates. Employer payroll tax withheld from salaries must be deposited with the FBR weekly, within 7 days, with a quarterly withholding statement filed by the 20th after each quarter-end.

Income tax for salaried persons runs on an eight-band scale under the Income Tax Ordinance, 2001, as amended by the Finance Act 2026, effective 1 July 2026. Earnings up to PKR 600,000 a year attract zero tax. The rate then rises from 1% on the PKR 600,001 to 1,200,000 band and tops out at 35% above PKR 7,000,000. The tax and payroll guide sets out every band and threshold.

Permanent workers are entitled to one month's notice of termination under the Industrial and Commercial Employment (Standing Orders) Ordinance, 1968, Standing Order 12. Notice applies in both directions. Probationers are not entitled to any notice. Probation under the Ordinance runs up to 3 months, with market practice extending to 6 months in many sectors.

Gratuity (severance) accrues at 30 days of wages per completed year of service, or any part in excess of six months. There is no statutory cap on total gratuity. Final pay must be settled within 2 days of termination under the Payment of Wages Act, 1936. Pakistan has no fixed unfair dismissal compensation cap. Labour courts award reinstatement or compensation at their discretion. The termination guide runs the full process.

The provincial layer matters. Punjab and Sindh each run their own minimum wages and social security funds (PESSI and SESSI) on top of the federal EOBI. An employee in Karachi (Sindh) and an employee in Lahore (Punjab) carry different statutory cost footprints even on the same salary. Most competitor guides present a single Pakistan figure. Teamed's cost calculator accounts for province.

Gratuity compounds with no ceiling. Unlike UK statutory redundancy pay, Pakistan gratuity under the Standing Orders Ordinance has no statutory maximum. A long-tenured employee's gratuity obligation grows 30 days of wages per year with no cap. Model this into your total cost of employment from day one, not at the point of termination.