How to hire and pay employees in Pakistan

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Pakistan Facts and Stats

Currency

Pakistani Rupee (PKR)

Employer Costs

16.7-22.7%.

Languages

English and Urdu.

Population

251.5 million.

Payroll frequency

Monthly.

Hiring

Grow your team in Pakistan

No entity, no problem

Emerald can hire and payroll your workers, quickly and compliantly with their ready to go entity. Make growing your team simple with Emerald as a global partner.

Pros & Cons of hiring in Pakistan

Hiring employees in Pakistan offers several benefits and challenges. On the positive side, Pakistan has a large and diverse labour pool with a growing number of skilled professionals, particularly in sectors such as IT, engineering, and finance. The cost of labour is relatively low compared to many other countries, which can lead to significant cost savings for employers. Additionally, the country is experiencing a rise in English proficiency, which facilitates communication in multinational businesses.

However, there are notable challenges, including regulatory complexities and bureaucratic hurdles that can affect hiring processes. Employers may also encounter issues related to infrastructure and reliability, such as inconsistent power supply and varying internet connectivity. Additionally, navigating labour laws and ensuring compliance with local regulations can be complex, potentially requiring legal and administrative support.

Why Pakistan is good for remote workers

Hiring remotely in Pakistan presents a strategic advantage due to the country’s burgeoning tech ecosystem and growing pool of digital talent. Pakistan has become a hub for IT and software development, with many professionals offering competitive skills in fields such as programming, graphic design, and digital marketing. Remote work enables employers to tap into this skilled workforce without the need for significant investments in physical office space or local infrastructure. Additionally, remote hiring helps bypass logistical challenges and fluctuating costs associated with traditional office setups, allowing businesses to benefit from Pakistan’s cost-effective labour market while leveraging a talent pool that is increasingly adept at remote collaboration tools and practices.

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Employment

Probation

Probation periods generally last between 3 and 6 months in the private sector.

Emerald Technology can onboard employees in Pakistan within 48 hours.

Insurance
01.

Health Insurance:

The public healthcare system in Pakistan is managed by the government and is primarily funded by government budgets providing services at no cost or little cost. This system covers many medical services such as outpatient care, emergency services and preventive care. Expatriates and foreign workers are required to have health insurance.

02.

Social Security:

In Pakistan, social security contributions are managed through the Employees Old-Age Benefits Institution (EOBI) and the Provincial Social Security Institutions and the contributions are mandatory for formal sector employees to provide benefits for pensions, disability and survivor benefits. Employers contribute 6% and employees contribute 1% of their monthly salary to EOBI. Employers contribute 7-9% while employees contribute 1-2% of their monthly salary to Provincial Social Security.

03.

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Leave Policy
01.

Maternity Leave:

In Pakistan, female employees who have been continuously employed for four months prior to childbirth are entitled to three months of paid maternity leave, plus an additional mandatory six weeks of post-natal leave.

02.

Paternity Leave:

Up to 30 days fully paid leave after the birth of the first three children.

03.

Parental Leave:

There are no provisions in the law regarding parental leave.

04.

Sickness Leave:

Employees in Pakistan are entitled to 10 days of fully paid sick leave for unexpected illnesses. If additional sick or medical leave is needed, up to 16 days, they receive 50% of their salary and must provide a medical certificate.

Onboarding

Onboarding

As the legal employer, Emerald Technology requires the following employee documents to ensure complete compliance:

Emerald Technology can onboard employees in Pakistan within 48 hours.
Termination

Resignation and Dismissal

When an employer dismisses an employee it must be with just cause and they must give them notice. The notice period starts from the day after the employer notifies the employee of the termination. Notice must be given in accordance with the following schedule at a minimum:

Notice Periods:

1 month.

Severance

If an employee is made redundant, they are entitled to a payment based on years of continuous service.

Severance Pay:

Employees receive severance pay of 30 days salary per year worked for the company.

Time off

Statutory Time off

After a year of continuous service, employees in Pakistan are entitled to 14 days annual leave, which must be taken

Public Holidays

  • New Year’s Day: January 1
  • Pakistan Day: March 23
  • Labour Day: May 1
  • Independence Day: August 14
  • Eid-ul-Fitr: Date varies based on the Islamic lunar calendar
  • Eid-ul-Adha: Approximately 70 days after Eid-ul-Fitr, date varies based on the Islamic lunar calendar
  • Ashura (10th Muharram): The date varies according to the Islamic lunar calendar
  • Eid-e-Milad-un-Nabi: Date varies based on the Islamic lunar calendar
  • Quaid-e-Azam Day: December 25
Emerald Technology can onboard employees in Pakistan within 48 hours.
Salary / Taxes

Work, Pay and Taxes

01.

Minimum Wage:

The minimum wage rates in Pakistan are provincial and differs in different areas of the country.

02.

Working Time and Overtime:

45 hours per week (5 days of 9 hours). Overtime is paid at 200% of the regular salary, increasing to 300% if it is completed on a public holiday.

03.

Salary Payments:

Monthly.

04.

Bonuses in Pakistan:

Businesses in Pakistan are not legally required to provide bonuses but they are frequently used.

05.

Income Tax:

  • PKR 0 to 600,000: 0%, 
  • PKR 600,000 to 1,200,000: 5%,
  • PKR 1,200,000 to 2,400,000: 15%, 
  • PKR – 2,400,000 to 3,600,000: 25%,
  • PKR 3,600,000 to 6,000,000: 30%,
  • Over PKR 6,000,000: 35%,
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