Pakistan
Employer of Record (EOR) in Pakistan: Hire, Run Payroll, Stay Compliant
Hire employees in Pakistan without setting up a local entity. Meteors handles employment contracts, monthly payroll in PKR, income tax withholding with the Federal Board of Revenue (FBR), EOBI contributions, provincial social security, and full compliance with Pakistan’s federal and provincial labour laws. From $99/employee/month.
Quick facts for hiring in Pakistan
| Item | Detail |
|---|---|
| Capital | Islamabad |
| Currency | Pakistani Rupee (PKR, Rs) |
| Official languages | Urdu, English (English used in all business contracts and legal proceedings) |
| Population | 251.3 million (2024 est.) |
| Tax year | July 1 to June 30 |
| Payroll cycle | Monthly (wages paid by the 7th of the following month) |
| Standard work week | Monday to Friday (some sectors Monday to Saturday), 9 hours/day, 48 hours/week |
| Minimum wage | PKR 40,000/month (Punjab, Sindh, KPK). PKR 37,000/month (Balochistan, Federal/ICT). |
| Income tax (salaried) | Progressive, 0% to 35% |
| Employer statutory cost | ~7% to 13% of salary (EOBI, provincial social security, Workers’ Welfare Fund) |
| Sales tax (GST) | 18% standard rate (federal), 17% in some provinces |
| Meteors EOR fee | From $99/employee/month |
Why companies remote hire in Pakistan
Pakistan has the world’s 5th largest population. Over 120 million people are between 15 and 64. The country produces roughly 500,000 university graduates annually.
Cost. A mid-level software developer in Lahore or Karachi earns $800 to $2,000/month. The same role in London costs $5,000 to $8,000. Pakistan ranks among the lowest-cost markets globally for English-speaking tech, finance, and operations talent.
Talent depth. Pakistan’s IT sector has grown over 40% in the last 5 years. The country exports $3+ billion in IT services annually. Lahore, Karachi, Islamabad, and Rawalpindi each have specialized talent pools.
Time zone. Pakistan Standard Time (PKT, UTC+5) overlaps with European business hours in the morning and Gulf/APAC hours in the afternoon.
Pakistan’s labour law operates at both federal and provincial levels. The 18th Constitutional Amendment (2010) devolved most labour legislation to the provinces. You need to register with SECP, FBR, EOBI, and the relevant provincial social security institution. That takes 3 to 6 months and costs $5,000 to $10,000.
An Employer of Record (EOR) in Pakistan removes all of that.
What is an Employer of Record (EOR) in Pakistan?
An Employer of Record in Pakistan is a company that legally employs workers on your behalf. You manage the person’s day-to-day work. The EOR handles everything else: compliant employment contracts, monthly payroll in PKR, income tax withholding, statutory contributions (EOBI, provincial social security), and employer registration.
Here’s how responsibility splits between you and Meteors:
| You | Meteors |
|---|---|
| Find and select the employee | Draft a compliant employment contract under Pakistani labour law |
| Define the role, responsibilities, and salary structure | Register the employee with EOBI, provincial social security (PESSI/SESSI), and FBR |
| Manage daily work, tasks, and performance | Process monthly payroll in PKR with correct income tax withholding |
| Decide on promotions, raises, termination | Calculate and remit EOBI contributions, provincial social security, Workers’ Welfare Fund |
| Set working hours and expectations | File employer tax returns with the Federal Board of Revenue |
| Approve leave requests | Handle onboarding, offboarding, gratuity settlement, and full-and-final payment |
Ready to hire your first employee in Pakistan?
Send us the role, city, and salary. We’ll return the full cost within 24 hours.
How Meteors Employer of Record works in Pakistan
You share the role details. We send the full cost within 24 hours.
Tell us the country (Pakistan), the role, the city, and the monthly salary. We’ll calculate the total employment cost: gross salary, employer contributions (EOBI, provincial social security, WWF where applicable), and our EOR fee.
We draft a compliant contract. Your hire signs.
Our Meteors Compliance-First EOR Framework generates employment contracts mapped to the Industrial and Commercial Employment (Standing Orders) Ordinance 1968, the applicable provincial Shops and Establishments Ordinance, and the Maternity and Paternity Leave Act 2023. Every contract covers:
- Designation and job description
- Monthly salary structure in PKR (basic + allowances: HRA, transport, medical, utilities)
- Working hours (9 hours/day, 48 hours/week max)
- Leave entitlements (annual, casual, sick, maternity/paternity, public holidays)
- Probation period (3 months standard, extendable to 6 months)
- Notice period (1 month for permanent employees)
- Termination conditions and gratuity calculations
- Confidentiality, non-disclosure, and IP assignment clauses
- Religious accommodation provisions (Ramadan hours, Friday prayers)
Payroll runs. Every month. On time.
Our Meteors Payroll Accuracy System processes monthly payroll in Pakistani Rupees.
- Gross-to-net salary calculation with full salary breakup
- Income tax withholding per FBR slab (Tax Year 2025-26)
- EOBI contribution (employer 5% + employee 1% of minimum wage)
- Provincial social security (PESSI/SESSI: employer 6% to 7%)
- Workers’ Welfare Fund contribution where applicable (2% of taxable income)
- Net salary transfer to employee’s bank account
- EOBI and tax remittance by the 15th of the following month
- Payslip generation and record keeping
You get one invoice in USD, EUR, or GBP. One line item. One payment.
Employment law in Pakistan: what your EOR handles
Federal-provincial split: the 18th Amendment
Pakistan’s 18th Constitutional Amendment (2010) transferred most labour legislation to the provinces. Punjab, Sindh, KPK, and Balochistan each have their own versions of core labour statutes. Meteors handles registration and compliance across all four provinces.
Working hours and overtime
Standard: 48 hours/week, 9 hours/day. Overtime: twice the ordinary rate (2x). Weekly maximum including overtime: 60 hours. Public holiday work: 300% in some provincial frameworks.
Leave entitlements
| Leave type | Entitlement |
|---|---|
| Annual (earned) leave | 14 days after 12 consecutive months of service |
| Casual leave | 10 days per year (full pay) |
| Sick leave | 8 to 10 days per year (varies by province; medical certificate required) |
| Public holidays | 14 to 18 days per year (federal gazette, plus provincial additions) |
| Maternity leave | 180 days for 1st child, 120 days for 2nd, 90 days for 3rd (full pay, Maternity and Paternity Leave Act 2023) |
| Paternity leave | 30 days (up to 3 times during service, Maternity and Paternity Leave Act 2023) |
| Pilgrimage leave | Available under applicable service rules for Hajj |
EOBI (national pension)
Mandatory for establishments with 5+ employees. Employer: 5% of minimum wage (PKR 2,000/month). Employee: 1% of minimum wage (PKR 400/month). Contributions are based on minimum wage, not actual salary.
Provincial social security (PESSI/SESSI)
| Province | Details |
|---|---|
| Punjab (PESSI) | Employer 7% of wages, employee PKR 40/month, ceiling up to PKR 37,000/month |
| Sindh (SESSI) | Employer 6% of wages, employee PKR 40/month, ceiling up to PKR 30,000/month |
| KPK (KPK ESSI) | Employer 6% of wages, employee PKR 40/month, provincial ceiling |
| Balochistan (Balochistan ESSI) | Employer 7% of wages, employee PKR 40/month, ceiling up to PKR 5,000/month |
Gratuity
30 days’ wages per completed year of service for permanent employees terminated for reasons other than misconduct. Meteors builds gratuity accrual into your cost structure from day one.
Income tax in Pakistan
Progressive tax system administered by the Federal Board of Revenue (FBR). Tax year: July 1 to June 30.
Tax rates for salaried individuals (Tax Year 2025-26)
| Annual taxable income (PKR) | Tax rate |
|---|---|
| Up to 600,000 | 0% |
| 600,001 to 1,200,000 | 1% of amount exceeding 600,000 |
| 1,200,001 to 2,200,000 | PKR 6,000 + 11% of amount exceeding 1,200,000 |
| 2,200,001 to 3,200,000 | PKR 116,000 + 23% of amount exceeding 2,200,000 |
| 3,200,001 to 4,100,000 | PKR 346,000 + 30% of amount exceeding 3,200,000 |
| Above 4,100,000 | PKR 616,000 + 35% of amount exceeding 4,100,000 |
Finance Act 2025-26 changes: the 600K-1.2M bracket dropped from 2.5% to 1%. The 1.2M-2.2M bracket dropped from 15% to 11%.
Termination and offboarding in Pakistan
Pakistan does not allow at-will termination for permanent employees.
| Worker category | Notice period |
|---|---|
| Permanent monthly-rated employee | 1 month (or 1 month’s wages in lieu) |
| Probationary employee | None required (either party can terminate) |
| Temporary/casual worker | 14 days |
| Dismissal for misconduct | No notice, but employer must conduct inquiry |
Gratuity at exit: 30 days’ wages per completed year of service. Meteors manages the full termination process: notice, gratuity, leave encashment, final salary, tax, and de-registration.
Meteors vs setting up a Pakistan entity
| Factor | Meteors EOR | Local entity |
|---|---|---|
| Setup cost | $0 (from $99/employee/month) | $5,000 to $10,000 (SECP registration, FBR, EOBI, provincial registrations) |
| Time to first hire | 3 to 7 days | 3 to 6 months (SECP incorporation alone takes 4 to 8 weeks) |
| Ongoing compliance | Handled by Meteors (in-house team in Pakistan) | You hire local HR, legal, accounting staff or multiple vendors |
| Legal liability | Meteors carries employer liability | Your entity carries all liability |
| Monthly admin | One invoice in USD, EUR, or GBP | Manage payroll, FBR withholding, EOBI, PESSI/SESSI, WWF, gratuity accrual yourself |
| Multi-province compliance | Meteors handles all 4 provinces | You register separately in each province where you have employees |
| Exit flexibility | Offboard employees, exit market, no wind-down | Closing a Pakistan entity requires SECP de-registration, FBR clearance, and can take months |
EOR vs PEO in Pakistan: which model fits?
EOR: Meteors is the legal employer in Pakistan. You don’t register with SECP, FBR, or EOBI. We handle all employment contracts, payroll, tax withholding, and statutory contributions. You manage daily work.
PEO: You need your own registered entity in Pakistan. The PEO handles HR administration and payroll, but legal employer obligations (contracts, liability, compliance) stay with your company.
If you don’t have a Pakistani subsidiary, an EOR is the only compliant way to hire employees in Pakistan. PEO is for companies that already have an entity and want to outsource HR.
How to find the right Employer of Record partner in Pakistan
Pakistan’s federal-provincial split makes EOR quality vary more than in single-framework countries. Here’s what separates a good provider from a risky one.
Multi-province registration. Some EOR providers only cover one province (usually Punjab or Sindh). If you plan to hire across Lahore, Karachi, Peshawar, and Quetta, confirm the provider is registered with PESSI, SESSI, KPK ESSI, and Balochistan ESSI. Meteors covers all four provinces.
Own entity, not a sub-agent. Ask whether the EOR operates through its own SECP-registered entity or routes employment through a local agent. Sub-agent arrangements create liability gaps. If the agent defaults, your employee’s EOBI contributions and social security can lapse. Meteors operates through our own entity.
FBR compliance track record. Income tax withholding in Pakistan follows FBR’s slab system, and the slabs change with each Finance Act. Your EOR needs to update tax calculations every July when the new tax year begins.
Religious accommodation as standard. Ramadan hours, Friday prayer breaks, and Islamic holiday scheduling aren’t optional extras. They’re legal obligations. A provider that treats these as requests rather than built-in compliance features doesn’t understand Pakistani employment law.
All-in pricing. Ask for a breakdown that includes onboarding, monthly payroll, EOBI remittance, provincial social security, FBR deposits, offboarding, and gratuity calculation. If any of these are billed separately, your low monthly fee is not what you’ll actually pay.
Compare Meteors against your current shortlist
We’ll walk you through our entity, our provincial coverage, and our full fee structure.
Mistakes foreign employers make when hiring in Pakistan
1. Ignoring the federal-provincial split
Punjab, Sindh, KPK, and Balochistan each have their own labour statutes. A single ‘national’ contract creates compliance risk across provinces.
2. Misclassifying employees as contractors
If someone works exclusively for your company on your schedule, labour courts classify them as an employee. Misclassification triggers backdated EOBI and provincial social security obligations.
3. Using fixed-term contracts for permanent roles
Some provincial frameworks cap fixed-term contracts at 9 months. Repeated renewals trigger automatic reclassification to permanent employment.
4. Not accounting for Ramadan working hours
Working hours during Ramadan are legally reduced to 6 hours/day for Muslim employees. Foreign employers must plan for this.
5. Skipping EOBI for small teams
EOBI is mandatory for 5+ employees. Skipping it through contractor arrangements triggers backdated contributions with penalties.
Who uses EOR services to remote hire in Pakistan?
European and US tech companies building remote engineering teams. SaaS and software companies hire developers, QA engineers, and data engineers in Lahore, Islamabad, and Karachi.
Startups scaling customer support and operations. Series A to C companies building 5 to 30 person teams. They need compliant employment structures for remote hire, not contractor arrangements.
Gulf-based companies hiring skilled professionals. UAE, Saudi, and Qatar-based companies hiring finance, HR, and technical professionals. PKT is 1 hour ahead of GST.
NGOs and development organizations. International organizations hiring program managers, researchers, and M&E specialists on compliant local contracts.
Public holidays in Pakistan (2026)
| Date | Holiday | Type |
|---|---|---|
| January 27 (est.) | Shab-e-Meraj | Religious (lunar) |
| February 5 | Kashmir Day | National |
| February 14 (est.) | Shab-e-Barat | Religious (lunar) |
| March 21-23 (est.) | Eid ul-Fitr (3 days) | Religious (lunar) |
| March 23 | Pakistan Day | National |
| May 1 | Labour Day | National |
| May 27-29 (est.) | Eid ul-Adha (3 days) | Religious (lunar) |
| May 28 | Youm-e-Takbeer | National |
| June 25-26 (est.) | Ashura (2 days) | Religious (lunar) |
| August 14 | Independence Day | National |
| August 25 (est.) | Eid Milad-un-Nabi | Religious (lunar) |
| November 9 | Allama Iqbal Day | National |
| December 25 | Quaid-e-Azam Day / Christmas | National |
Get your free Pakistan cost breakdown
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FAQs: Employer of Record in Pakistan
An Employer of Record in Pakistan is a company that legally employs workers on your behalf. The EOR handles employment contracts, payroll in PKR, income tax withholding with FBR, EOBI contributions, provincial social security, and compliance with Pakistan’s federal and provincial labour laws.
Meteors Employer of Record fees start at $99/employee/month. The total includes gross salary, employer statutory contributions (EOBI, provincial social security, WWF, gratuity accrual), and the Meteors fee. No setup fees. No hidden charges.
3 to 7 business days from signed agreement to employee start date. Compare that to 3 to 6 months for entity setup.
No. Meteors acts as the legal Employer of Record in Pakistan through our own registered entity. We handle SECP, FBR, EOBI, and provincial social security across all four provinces.
Pakistan does not allow at-will termination. Meteors handles the full process: 1-month notice, gratuity (30 days per year), leave encashment, final salary, tax withholding, and de-registration from EOBI and provincial social security.
An EOR is the legal employer. You don’t need to register with SECP, FBR, or EOBI. The EOR handles everything: contracts, payroll, tax, and compliance across all four provinces. A PEO requires you to have your own registered entity in Pakistan. If you don’t have a Pakistani subsidiary, EOR is the only compliant option.
Three things matter most. First, multi-province coverage: confirm the provider is registered with PESSI, SESSI, and equivalent bodies in KPK and Balochistan. Second, own entity: providers that sub-contract to local agents create liability gaps. Third, all-in pricing: onboarding, payroll, EOBI, provincial social security, FBR deposits, and offboarding should all be included in one monthly fee.