Hiring in Pakistan brings a set of registrations and monthly contributions that are easy to miss, because they sit with different federal and provincial bodies. This guide lists what an employer should plan for. It is an orientation, not legal or payroll advice; rates are revised regularly, so confirm current figures before relying on them.
Minimum wages are provincial
Each province sets its own minimum wage, usually revised from 1 July each year. For 2025-26, Punjab, Sindh and Khyber Pakhtunkhwa set PKR 40,000 a month and Balochistan PKR 37,000 (Vialto Partners, October 2025). Rates for 2026-27 are notified by each province; check the current notification for the province where staff work.
Old-age benefits (EOBI)
Employers register with the Employees’ Old-Age Benefits Institution (EOBI) and pay monthly contributions of 5 percent from the employer and 1 percent from the employee. Both are calculated on the statutory minimum wage, not the actual salary. At a minimum wage of PKR 40,000 this came to PKR 2,000 from the employer and PKR 400 from the employee per month (Vialto Partners).
Provincial social security
Employers also contribute 6 percent of the minimum wage per covered employee to the provincial social security institution: PESSI in Punjab, SESSI in Sindh, and their equivalents in Khyber Pakhtunkhwa and Balochistan. This funds medical care and cash benefits for workers. The SECP’s incorporation form can pass company details to EOBI and the provincial institutions at the time of registration (SECP).
Income tax on salaries
Employers withhold income tax from salaries each month under the Income Tax Ordinance 2001, deposit it with the Federal Board of Revenue, and file periodic withholding statements. Salary tax slabs change with each federal budget.
Workers’ funds and other obligations
- Workers’ welfare and profit participation funds: companies above certain thresholds contribute a share of profits to workers’ welfare and workers’ profit participation funds under federal and provincial laws.
- Group life insurance and other obligations can apply under provincial labour laws, depending on the type of establishment.
- Written appointment letters setting out terms of employment are required under provincial standing orders for many establishments.
Foreign staff
Foreign employees need a work visa. The Board of Investment processes work visa recommendations on the basis of the company’s registration and the employment agreement (BOI, FAQs).
A practical checklist
- Confirm the entity that will employ staff is registered (see our company registration guide).
- Register with EOBI and the provincial social security institution.
- Set salaries at or above the current provincial minimum wage.
- Set up monthly payroll tax withholding and filings with the FBR.
- Check workers’ fund thresholds and provincial labour law requirements with a payroll adviser.
How PIVRA can help
PIVRA’s local representation and ongoing support (from USD 2,000 per month) gives you a point of contact in Pakistan for coordination and research while you build your presence, and our registration and licensing guidance maps the registrations for your sector. We work alongside your payroll and legal advisers. Request a quote.