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Pakistan has very low employer statutory costs (EOBI flat PKR 1,600/month + provincial social security ~6%), progressive FBR income tax, mandatory Eid bonuses, and a massive English-speaking tech talent pool. EOR eliminates provincial registration complexity. Rippling EOR handles all compliance.
Pakistan is a South Asian economy with one of the world's largest and fastest-growing technology talent pools. Over 300,000 IT graduates per year. Karachi is the financial hub; Lahore and Islamabad are the primary tech markets. EOR is the dominant structure for international companies hiring Pakistani talent, particularly due to SECP entity formation complexity and provincial regulatory fragmentation. Pakistani developers are highly cost-competitive for USD/GBP/EUR-paying employers.
Setting up a Pakistani Pvt. Ltd. requires SECP registration, provincial social security registration (PESSI/SESSI varies by province), EOBI registration, and FBR employer registration. Provincial regulatory fragmentation makes multi-province hiring complex. EOR is strongly recommended for 1–20 employees, eliminating the need to register in each province where employees are located. EOR also manages the July–June tax year transition which affects annual withholding calculations.
EOBI: flat PKR 400/month. Provincial social security (PESSI/SESSI): ~1% of wages up to ceiling. Income tax: progressive 0–35% withheld monthly; tax year July–June.
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EOBI: flat PKR 1,600/month per employee. Provincial social security (PESSI/SESSI): ~6% on wages up to ceiling. Total employer statutory on-cost is very low by global standards — making Pakistan's total employer cost among the most competitive in Asia.
Progressive 6-bracket: 0% (up to PKR 600,000); 5% (PKR 600,001–1,200,000); 15% (1,200,001–2,200,000); 25% (2,200,001–3,200,000); 30% (3,200,001–4,100,000); 35% (above 4,100,000). Tax year July–June. Monthly withholding to FBR.
Annual leave: 14 days per year (after 1 year) under Factories Act. Sick leave: 10 days paid. Casual leave: 10 days. Maternity: 16 weeks paid (employers with 10+ employees). Public holidays: 14 national/regional holidays.
Notice: 1 month standard. Severance (retrenchment): 30 days' wages per year of service. Unfair dismissal: reinstatement or 3–12 months' wages. Rippling EOR manages full termination process including EOBI and provincial de-registration.
Non-Pakistani nationals require work permits from the Ministry of Interior. Work permits subject to nationality quotas. Processing: 4–8 weeks. Rippling EOR supports work permit applications through its Pakistani entity.
Statutory: EOBI (PKR 1,600/month employer), provincial social security (PESSI/SESSI ~6%), 14 days annual leave, 16 weeks maternity paid, sick leave. Market standard: private medical insurance, mobile phone, annual bonus, Eid bonuses (2 months standard), transport allowance. Karachi, Lahore, Islamabad are primary markets.
Rippling EOR Pakistan operates through a local Pakistani entity. Key Pakistan-specific handling: EOBI flat employer contributions, provincial PESSI/SESSI registration and contributions, FBR monthly income tax withholding (July–June tax year), Eid bonus calculation and payment, and termination management.
Rippling EOR employs Pakistani staff through its local Pakistani entity, handling EOBI (flat PKR 1,600/month employer), provincial PESSI/SESSI registration and contributions, FBR monthly income tax withholding, and all statutory compliance. The client company directs the employee's work. Eid bonuses (2 per year) are calculated and paid automatically.
Pakistan has two mandatory Eid bonuses: Eid-ul-Fitr and Eid-ul-Adha. The standard market practice is 1 month's basic salary per Eid. Rippling EOR calculates and pays Eid bonuses as part of the payroll cycle, pro-rated for partial years. These are statutory requirements for many employee categories under the Payment of Wages Act.
Pakistan's minimum wage is set provincially. Punjab and Sindh: PKR 37,000/month (2024). KPK: PKR 36,000/month. Minimum wages have been increasing rapidly due to inflation. Rippling EOR tracks provincial minimum wage updates and ensures all employees are paid at or above the applicable provincial minimum.
Notice periods: 1 month standard. Severance (retrenchment): 30 days' wages per year of service under the Standing Orders Ordinance. Unfair dismissal: reinstatement or 3–12 months' wages. Probation: up to 3 months. Rippling EOR manages terminations compliantly including EOBI and provincial social security de-registration.
