Payroll
/
Pakistan
Global coverage
Available in +150 countries
Employer costs, taxes, minimum wage and leave rules for hiring here, plus the faster route: hire a contractor with Ontop, no local entity needed.
2026
Currency
PKR ₨ (Pakistani Rupee)
Employer contributions
5% EOBI employer + provincial SS ~6%
Minimum wage
PKR 37,000/month (2026 federal minimum)
Payment frequency
Monthly
July 1 - June 30 (fiscal year)
Capital
Islamabad
Timezone
PKT (GMT+5)
Employee or contractor
If the work is project-based or you need to move fast, a contractor gets you the same talent with a fraction of the paperwork.
Employee
~PKR 245,000 total
/month
For a gross salary of
PKR 200,000 gross/month
Setup
Local entity or employer of record, plus tax and social security registration
Employer contributions
5% EOBI employer + provincial SS ~6%
Mandatory extras
Eid Bonus / Annual Bonus
Monthly admin
Monthly payroll - EOBI + provincial SS by 15th - FBR withholding - annual Sep return
Contractor with Ontop
No local entity
$49
/contractor/month
The agreed rate, plus Ontop from $49 per contractor per month.
Sign a contract, yours or an Ontop template. No local registration on your side.
No employer contributions: the contractor handles their own taxes and social security.
One payment per invoice, in one payroll run.
Paid into their Ontop Global Account in USD.
See the full side-by-side comparison
+
A contractor's rate usually covers their own taxes, so compare total cost, not just gross pay. Run your numbers in the contractor vs employee calculator.
Hiring here: the full breakdown
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Payroll guide
Employer costs come on top of gross pay. Use these figures to budget a hire and to compare it with a contractor rate.
Total monthly cost
~PKR 245,000 total
Example gross salary
PKR 200,000 gross/month
~PKR 126,000 net
Net pay to the employee
Tax and employee contributions
Withheld from gross pay
~PKR 45,000 SS+EOBI
Employer contributions on that salary
Employer contributions
5% EOBI employer + provincial SS ~6%
Employee contributions
1% EOBI employee + provincial SS
Total cost above gross
~22.5% above gross
Figures are estimates for planning. Rates change with each budget and can vary by sector, so confirm them before you make an offer.
What people earn here, from the legal floor to the main cities, plus the extra pay most employers budget for.
National average
~PKR 120,000
Per month
Karachi
PKR 150,000 - 500,000
~50%
Lahore
PKR 130,000 - 400,000
~30%
Monthly gross. National average salary per year:
~PKR 1,440,000
Minimum wage
PKR 37,000/month (2026 federal minimum)
Paid:
Monthly
Extra pay
Eid Bonus / Annual Bonus
1 month per Eid (2x/year) common in large employers
Eid ul-Fitr / Eid ul-Adha
Collective agreements can set sector minimums above the national one. Check whether one applies to the role before you set the salary. Next step: estimate the full cost of an employee.
Who collects what, how often, and what happens when a payment is late.
Income tax brackets
0% up to PKR 600,000 / 5% / 15% / 25% / 30% / 35%
Tax year:
July 1 - June 30 (fiscal year)
Filing calendar
Monthly by 15th
Social security payments
September 30 (annual income tax return)
Income tax
By August 31
Employee tax certificate
Tax Deduction Certificate (TDC)
September 30
Annual return
Annual Income Tax Return
Late payment penalties
Late EOBI: 2% monthly; late FBR: 16% per annum default surcharge
Who collects what
FBR (Federal Board of Revenue)
Income tax
EOBI
Old-age pension benefits
PESSI / SESSI (provincial)
Provincial social security (injury, health)
The time off and paid leave every employee is entitled to by law. Budget for it when you compare an employee with a contractor.
Annual leave
Annual Leave / Earned Leave
14 days/year (after 12 months)
Public holidays
~19 public holidays (national + provincial + religious)
Sick leave
Sick Leave
Employer: full pay for 16 days/year; PESSI/SESSI after
Maternity leave
12 weeks (84 days) maternity
Full pay from employer
The contracts you can use, and what ending an employment relationship costs.
Permanent
Permanent Employment Contract
Fixed term
Fixed-Term Contract
Independent contractor
Freelance / Service Contract
Collective agreements
Collective Bargaining Agreement (CBA)
Ending employment
Gratuity / Provident Fund
How it is calculated
15-30 days/year depending on employment terms
Calling someone a contractor does not make them one. If the role works like employment in practice, local authorities can reclassify it, with back contributions and penalties.
The errors that most often trigger back payments and penalties here, and what to do instead.
EOBI and Provincial SS Dual Registration Failure
Risk Level: HIGH
Pakistan requires separate registration with EOBI (federal) and the applicable provincial social security institution (PESSI in Punjab, SESSI in Sindh, BESSI in Balochistan). Many employers register only with EOBI and miss provincial SS. Provincial inspectors impose retroactive contributions plus fines.
TDS (Tax Deduction at Source) Non-Filer Surcharge
Risk Level: HIGH
Pakistan's FBR maintains an active taxpayer list (ATL). Employees who are not on the ATL are subject to double withholding tax rates. Employers must verify ATL status of every employee and adjust withholding accordingly.
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FAQ
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Ontop works with contractors, not employees. As Contractor of Record, Ontop handles contracts, compliance documents and payments for contractors in 150+ countries. To employ someone, you need a local entity or an employer of record. Ontop doesn't act as your employer of record.
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Employers pay contributions on top of gross salary. The cost table on this page shows the rates that apply here and a worked monthly example. A contractor with Ontop costs the agreed rate plus Ontop from $49 per contractor per month.
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Many countries require an extra month or an annual bonus for employees. The salaries section on this page shows the one that applies here and when it is usually paid. Contractors are paid what you agree in the contract.
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Employers withhold income tax and the employee's social security share every pay run, then pay them to the local authorities. The taxes section on this page lists the brackets, rates and filing deadlines that apply here.
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Yes. The contractor vs employee calculator compares the full cost of an employee, employer contributions included, with a contractor rate plus Ontop's monthly fee.
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When the work is project-based, you need to start fast or you don't have a local entity. If the person will work fixed hours, under your direction and only for you, local law may treat them as an employee, so hire them as one.
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Misclassifying employees as contractors, missing tax and social security deadlines, and ignoring collective agreements that set higher wage floors. The mistakes section on this page covers the ones that come up most often here.
Compare employer costs, taxes and contractor rules in nearby countries:
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.