Pakistani Compliance
What Pakistani Law Requires of an Employer
The obligations a Pakistani employer actually carries, and what HRMZY does about each. Labour law is provincial, so several of these differ by province.
EOBI on minimum wage, not actual salary
EOBI contributions are calculated on the notified minimum wage rather than on what the employee is actually paid — the Act defines wages that way. Running EOBI on gross salary overstates it. HRMZY’s payroll engine is configured to calculate on the statutory base rather than on gross salary. EOBI — EOB Act 1976, s. 2(p)
EOBI 5% employer, 1% employee
The employer contributes 5% and the employee 1%, six per cent per insured person per month. HRMZY carries both halves per employee, so the contribution return is built from one record. EOBI
The employer’s 5% cannot be deducted
An employer may not deduct its own 5% share from wages or recover any part of it, notwithstanding any agreement to the contrary. HRMZY holds the employer share as an employer cost rather than as a payslip deduction. EOBI — EOB Act 1976, s. 9(3)
Register within 30 days
An employer must notify EOBI of the establishment within 30 days of the Act becoming applicable to it. HRMZY records headcount over time, which is what determines when that duty is triggered. EOBI — EOB Act 1976, s. 11(1)
Labour law is provincial
Since the Eighteenth Amendment, labour legislation sits with the provinces — so leave, hours and minimum wage genuinely differ between Punjab, Sindh, KP and Balochistan. HRMZY holds entitlement rules per location instead of one national set. National Assembly — 18th Amendment
Sindh social security at 6%
Under the Sindh Employees’ Social Security Act the employer contributes six per cent and may not deduct its share from the employee. HRMZY holds the workplace location on each employee, so the applicable provincial scheme is configured per site rather than nationally. Sindh Social Security Act 2016, s. 20
Leave under Shops and Establishments
Annual, casual and sick leave for commercial establishments come from the provincial Shops and Establishments legislation, and the entitlements are not identical across provinces. HRMZY tracks each balance separately per location. Shops and Establishments Ordinance
Gratuity on separation
Gratuity is payable on the terms set by the Standing Orders where they apply. HRMZY holds continuous-service dates and final pay in one record so the calculation is not reconstructed by hand. Standing Orders Ordinance 1968
Salary tax withholding
Employers must deduct tax from salary at the time of payment under the Income Tax Ordinance. HRMZY’s payroll engine holds the applicable slabs and applies them in the pay run, keeping the per-employee record the statement is built from. FBR — Income Tax Ordinance, s. 149