Hiring in Pakistan: Complete Guide 2027
Everything you need to know about hiring and managing employees in Pakistan
Overview
Pakistan is among the lowest-cost English-speaking labour pools in Asia for software, support and back-office roles, with a thin statutory layer. Employer on-costs run 6 to 8% of gross: provincial social security at 6% of wages up to the ceiling, plus a flat EOBI pension contribution of PKR 2,000 a month on the PKR 40,000 minimum wage, not on salary. The cost sits elsewhere: gratuity of 30 days' wages per year of service, a SECP registration that takes months for a foreign owner, and four provincial social security bodies. Most foreign employers use an EOR for those three reasons.
Currency
Primary Language
Payroll Tax
Pay Frequency
Overview
Employer Costs
Employer Social Contributions
Mandatory Benefits
EOR Service Fee
Total Additional Cost
Employee Deductions
Income Tax
Employee Social Contributions
Mandatory Employee Benefits
PAYROLL & SETUP
Setting Up Payroll in Pakistan
Payroll in Pakistan runs monthly in PKR. An employer registers with the SECP, with the FBR for a National Tax Number and withholding, with the EOBI for pensions and with the social security institution of each province where staff sit: PESSI in Punjab, SESSI in Sindh, KPESSI and BESSI. Salary tax for 2025-26 follows the Finance Act 2025 schedule: nil to PKR 600,000 a year, 1% to 1.2 million, 11% to 2.2 million, 23% to 3.2 million, 30% to 4.1 million and 35% above, plus a 9% surcharge above PKR 10 million. Non-filers pay higher withholding, so the EOR checks the Active Taxpayer List. EOBI is 5% employer and 1% employee on the PKR 40,000 minimum wage: PKR 2,000 and PKR 400 a month, flat. Provincial social security is 6% of wages up to the ceiling, employer only. The EOR files the monthly withholding statement, the EOBI and PESSI or SESSI returns and the annual salary certificate, and accrues gratuity or runs a provident fund.
Key Labor Laws &
Requirements
Employment Contracts
- Written appointment letter required for permanent staff
- Contracts in English are standard
- Probation 3 months
Leave & Time Off
- 14 days annual leave after 12 months
- 10 casual and 16 sick days a year
- Maternity 12 weeks (16 in Sindh)
Termination Rules
- One month's notice or pay in lieu
- Written reasons; inquiry before a misconduct dismissal
- Gratuity: 30 days' wages per year of service
COMPLIANCE
Gratuity, Notice and Provincial Registrations in Pakistan
Permanent staff in Pakistan fall under the provincial Standing Orders (the 1968 West Pakistan ordinance as adopted by each province, Sindh's 2015 act). Dismissing a permanent employee needs one month's written notice or a month's pay, written reasons, and gratuity at 30 days' wages per completed year of service, unless a provident fund with employer contributions replaces it. Misconduct dismissals need a charge sheet and an inquiry first. Probation is three months. Leave is 14 days annual after 12 months, 10 casual and 16 sick days, 10 to 14 public holidays and 12 weeks maternity (16 in Sindh), on a 48-hour week. The risk is registration, not litigation: staff run on a partner's EOBI or SESSI file leave no record in your provider's name.
Key Challenges
- Four provincial social security bodies (PESSI, SESSI, KPESSI, BESSI), each with its own ceiling
- Gratuity of 30 days' wages per year of service for permanent staff
- SECP registration and repatriation approvals take months for a foreign entity
- Non-filer withholding rates double the tax cost of an unregistered hire
- PKR volatility and State Bank exchange rules on funding payroll
Country Highlights
Advantages
- Engineering salaries at a fraction of Gulf and European levels
- English is the working language of contracts and payslips
- Employer on-costs of 6 to 8% plus a flat PKR 2,000 EOBI contribution
- One month's notice on either side for permanent staff
- Large software export sector registered with PSEB in Karachi, Lahore and Islamabad
Popular Industries & Roles
Technology
Avg. Salary: PKR 2M-PKR 5M
Karachi, Lahore and Islamabad supply software engineers to US and Gulf firms, usually employed by PSEB-registered exporters
Customer Support & BPO
Avg. Salary: PKR 1M-PKR 2M
English-speaking support and back-office teams in Karachi and Lahore work US and UK hours for a fraction of onshore pay
Finance & Accounting
Avg. Salary: PKR 1.5M-PKR 3.5M
A large pool of ACCA and ICAP-qualified accountants staffs offshore finance and bookkeeping functions for UK and Gulf firms
Top 3 Providers in Pakistan
Based on our analysis of pricing, compliance record, service quality, and customer reviews
e-square Global Partners
- Pakistan EOR with CoreHRMS platform
- Founded 2006 — 19 years Pakistan
- 100+ clients; 10,000+ payroll staff
- ISO 27001:2022 certified; no published pricing
Deel
- EOR in 130+ countries; owned entities in 120+
- Contractor and EOR in one platform
- 300+ integrations including Slack, Workday
- AI-powered compliance automation
Vurke
- UAE / MENA EOR + global payroll
- 95+ countries claimed; WPS compliance
- DIFC DEWS; ISO 27001 claimed
- GPA recognition claimed; Pakistan/Bangladesh ops
Frequently asked questions
Hiring in Pakistan through an EOR, in short.
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How much does an employer pay on top of salary in Pakistan?
Employer contributions in Pakistan come to ≈6–8% + EOBI; the largest mandatory line is Social security 6%. With the other statutory benefits and a typical EOR fee, budget ~25–50% on top of gross salary.
What does an EOR charge per employee in Pakistan?
Published EOR fees in Pakistan run $200–450/mo per employee per month, with any setup fee negotiated separately. The fee is flat, so it weighs less as the salary rises.
What does an employee in Pakistan pay in tax and contributions?
Income tax is 0–35% progressive and employee social contributions are ≈1% (EOBI, flat) (PKR 400/mo EOBI), both withheld by the employer on every pay run.
How long does it take to hire through an EOR in Pakistan?
2-5 Days once the employee's documents are in. The contract is issued by the EOR's local entity and payroll runs on the local cycle (Monthly).
Which EOR providers rank best in Pakistan?
e-square Global Partners, Deel and Vurke hold the first three places in our ranking for hiring in Pakistan. The full top 10, with the questions to put to each provider before signing, is here: Top 10 EOR providers in Pakistan.
Find a better EOR — without risk
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