Hiring at a Glance

Pakistan offers a large (240M+) and youthful labor pool. Its economy is diversifying, with growth in IT, fintech, manufacturing, and telecom sectors. Key industries include textiles, pharmaceuticals, and IT outsourcing. English is widely used in business and technology, making Pakistan attractive for global IT and BPO roles. The government provides certain incentives for exporters and IT companies. However, employers must navigate a layered regulatory system: labor laws are administered both federally and provincially, and social security schemes (e.g. EOBI, provident funds) add to payroll complexity.

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Key characteristics of talent market

• Young, growing workforce: Pakistan’s median age is under 25, with high youth employment potential. A significant portion of the population is formally educated in engineering, computer science, and business fields.
  
• Competitive outsourcing hub: Pakistan’s BPO/IT services sector is expanding, aided by English fluency and time-zone overlap with East Asia and the Middle East. Many graduates are trained in software and business process skills.
  
• Regional language skills: Urdu is the national language, but English is common in corporate settings. Multilingual (Urdu, Punjabi, Sindhi, Pashto) talent can serve regional markets.
  
• Evolving tech scene: Demand is rising for roles in software development, e-commerce, healthcare IT, fintech, and support (call centers). Compliance and finance functions are also in demand, especially for multinational operations.
  
  

Most In-Demand Skills in 2026

Pakistan’s fastest-growing job needs are in technology and finance. Top skills include software development (Java, .NET, mobile), data engineering/BI, biotechnology (e.g. healthtech), healthcare IT, and financial services (accounting, risk management). Additionally, customer support and back-office operations (English-speaking) are in demand for international companies. As regional markets digitize, digital marketing and e-commerce management skills are also increasingly sought.

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Top Universities Supplying Talent

Leading universities include National University of Sciences & Technology (NUST, Islamabad), Lahore University of Management Sciences (LUMS), University of Engineering & Technology (Lahore), Ghulam Ishaq Khan Institute (GIKI, Swabi), and Institute of Business Administration (IBA, Karachi). These institutions are known for strong engineering, computer science, and business programs, producing many of Pakistan’s IT and finance professionals. Other notable schools: COMSATS University, Beaconhouse School System (school leavers), and Karachi Institute of Economics & Technology (KIET).

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Salary Benchmarks for Roles

Pakistani salaries (in PKR, 2026) have been rising due to inflation. As a rough guide: a mid-level software engineer might earn PKR 900,000–1,500,000 per year; a data engineer/scientist around PKR 1,500,000–2,500,000; a finance manager or senior accountant about PKR 800,000–1,800,000. Fresh graduates typically start well below these ranges, while experienced hires in Islamabad or Karachi may command higher pay. Notably, there is no mandatory 13th-month salary in Pakistan; bonuses are discretionary. Benefits often include provident fund contributions (matched by employer) and possible health insurance.

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Employer of Record vs Legal Entity Setup in Pakistan

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To legally hire employees, a company must

• Register with SECP and FBR: Incorporate an entity (private limited or branch) via the Securities and Exchange Commission of Pakistan (SECP) and obtain a National Tax Number (NTN) from the Federal Board of Revenue (FBR).
  
• Social security registrations: Register with Employees’ Old-Age Benefits Institution (EOBI) and provincial social security (ESSI) schemes. Employers must enroll employees in EOBI for pension benefits and make monthly contributions. If applicable, also register with any provincial provident fund.
  
• Payroll formalities: Issue written employment agreements (not mandated for all categories, but advised) and collect personal documentation (ID, bank details). Maintain the “Computerized National Identity Card” (CNIC) records.
  
• Compliance filings: File monthly and annual returns with FBR and social security bodies. Keep formal attendance and payroll ledgers. Pakistan requires that employers retain payroll records (Form IT-3 tax statements, EOBI filings, etc.) for five years.
  

Without proper registrations, employers risk fines and legal action. For example, failure to register a worker with EOBI attracts penalties.

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Cost of Entity Setup

Setting up a company in Pakistan is relatively straightforward. Government fees for incorporation are modest (few thousand PKR), and no large minimum capital is required beyond nominal levels. However, ancillary costs can arise: legal fees for document preparation, and the need to open a local bank account (often requiring substantial initial deposits for foreign nationals). The entire process (approval from SECP, tax registration, trade license) can take 2–4 weeks under normal conditions. Many foreign firms use an EOR to bypass this setup process entirely, given the bureaucracy and ongoing accounting obligations.

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What Hiring Through an EOR Means in Pakistan

An Employer of Record (EOR) in Pakistan becomes the legal employer registered with the Federal Board of Revenue (FBR), provincial labour departments, social security institutions, and EOBI, while the employee works exclusively for your company. You manage daily work and performance; the EOR carries all statutory employer responsibility.

Pakistan’s employment system is governed by:

• Industrial & Commercial Employment (Standing Orders) Ordinance
  
• Provincial Shops & Establishments Acts
  
• Income Tax Ordinance
  
• Employees’ Old-Age Benefits Institution (EOBI)
  
• Provincial Social Security Institutions (e.g., PESSI, SESSI)
  

Foreign companies cannot legally employ staff in Pakistan without:

• A Pakistani employing entity
  
• FBR tax registration
  
• Provincial labour and social security registration
  
• Payroll and compliance setup
  

An EOR provides this employer infrastructure without requiring you to establish a Pakistani company.

An EOR in Pakistan handles:

• Pakistan-law compliant employment contracts
  
• Payroll processing in PKR
  
• Income tax withholding and filing
  
• EOBI registration and payments
  
• Provincial social security contributions
  
• Minimum wage compliance
  
• Statutory leave and public holidays
  
• Termination and labour-court handling
  
• Immigration and work permits
  

This model is ideal for companies that want to hire in Pakistan without managing FBR registration, EOBI, and provincial labour compliance directly.

Risk Involved in Both Models

Pakistan’s labour system is documentation-driven and province-specific.

Key characteristics:

• Written contracts required
  
• Provincial minimum wage rules
  
• Mandatory EOBI and social security
  
• Labour courts and labour inspectors
  

Compliance failures can result in:

• Back payment of wages
  
• EOBI penalties
  
• Social security penalties
  
• Labour-court compensation orders
  

In Pakistan, payroll under-reporting and improper termination are the biggest employer risks.

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EOR Vs. Entity: When to use What?

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Why an EOR Is the Most Efficient Way to Hire in Pakistan

Pakistan offers strong talent in engineering, IT, design, finance, and operations but employment is governed by provincial rules, social security systems, and labour-court oversight.

An EOR is not just payroll. It is the legal employer recognised by Pakistani authorities, responsible for:

• Standing Orders compliance
  
• FBR and tax filings
  
• EOBI and social security
  
• Payroll execution
  
• Termination handling
  

This allows foreign companies to operate in Pakistan without inheriting provincial labour-law and inspection risk.

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#1. EOR Manages Provincial Labour Law Differences

Each province sets its own:

• Minimum wage
  
• Working hour rules
  
• Leave entitlements
  
• Shop & Establishment compliance

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#2. EOR Controls FBR, EOBI & Payroll Risk

Employment cost includes:

• Income tax
  
• EOBI
  
• Provincial social security

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#3. EOR Controls Termination & Labour-Court Risk

Termination in Pakistan must follow Standing Orders:

• Valid grounds
  
• Notice or pay in lieu
  
• Documentation

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#4. EOR Avoids Entity & Administrative Burden

Entity setup requires:

• Company registration
  
• FBR and labour registration
  
• Payroll systems
  
• Inspections

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EOR vs. PEO in Pakistan: How to Decide the Right Hiring Model?

A PEO in Pakistan cannot legally employ workers. A Pakistani employing entity is required.

• PEO: HR/payroll support only
  
• EOR: Legal employer

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Payroll, Taxes, and Monthly Compliance

Pakistan’s payroll runs monthly (though weekly or bi-monthly pay is permitted, salaries must be paid at least monthly). Key payroll obligations:

• Income tax withholding: Salaried employees are subject to progressive income tax (current brackets range from 0% up to 35%). Employers must withhold monthly on salaries and issue an annual tax statement (Form IT-3) for employees to file returns. The annual tax filing deadline (for salaried individuals) is September 30.
  
• EOBI contributions: Employers contribute 5% of the employee’s wages to EOBI (pension fund); employees contribute 1%. Registration and deposit of EOBI are monthly requirements.
  
• Provincial social security: In some provinces, employers also pay contributions for workers’ compensation or health insurance (e.g. Punjab ESSI).
  
• Payroll procedures: After calculating gross pay, deduct tax and EOBI/ESSI, and pay net salaries. Generate pay slips and file a monthly payroll ledger with tax details.
  
• Record retention: Employers must retain payroll documents (e.g. pay registers, tax filings, EOBI forms) for five years to satisfy audits by tax or labor authorities.
  

For example, all employers must supply Form IT-3 for each employee and preserve these returns for five years. Noncompliance (late tax deposits, missing filings) can trigger penalties under Pakistan’s tax laws.

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Salary Structure: Where Most Compliance Issues Begin

Pakistani law has strict overtime rules: any work beyond 9 hours per day or 48 hours per week is considered overtime and must be paid at double the normal rate. Miscalculating or ignoring overtime is a common violation. Also, employers often misclassify allowances (housing, travel, utilities) in ways that reduce payroll taxes – but many such benefits should actually count toward pension and gratuity calculations. For example, labor regulations treat guaranteed allowances and bonuses as part of “wages” for certain benefits. Errors here not only underpay employees but also reduce contributions to EOBI or provincial funds, leading to compliance breaches.

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What Monthly Payroll Operations Actually Involve

Monthly payroll tasks in Pakistan include:

• Gross-to-net calculation: Tally gross salary plus any overtime or bonuses, then deduct income tax and employee contributions (EOBI, any provident fund or social security).
  
• Payslips and payments: Issue formal payslips (often required for bank transfers) and disburse salaries via bank by the agreed pay date.
  
• Government payments: Deposit employees’ income tax with FBR (via online banking) and send employer/employee EOBI payments to the EOBI bank account.
  
• Compliance filings: There is no single unified payroll form, but employers submit periodic tax filings and EOBI contribution statements. For example, accounts must include payroll figures in the annual tax return.
  
• Data retention: Store all payroll data (salary sheets, tax withholding records, EOBI filings) for at least five years.
  

Consistent monthly payroll processing is critical, as Pakistan’s authorities can audit past pay runs. Companies often rely on professional payroll services to manage this, ensuring all statutory deductions and filings are correct.

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Step-by-Step Onboarding Process With an EOR in Pakistan

Hiring in Pakistan is a registry-driven, province-sensitive process. A compliant onboarding flow protects you from FBR penalties and labour-court disputes.

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1. Confirm EOR Registrationg

Verify the EOR is registered with:

• FBR for income tax
  
• Provincial labour department
  
• Provincial social security institution
  
• EOBI
  

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2. Identify Governing Province

Determine where the employee works. This controls:

• Minimum wage
  
• Working hours
  
• Leave rules
  
• Social security authority
  

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3. Validate Role Classification

EOR assesses:

• Permanent vs contractual status
  
• Standing Orders category
  
• Working time rules
  
• Overtime eligibility
  

Misclassification leads to wage and overtime claims.

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4. Structure Salary and Tax Model

EOR validates:

• Gross salary in PKR
  
• Income tax slab
  
• EOBI contribution
  
• Social security base
  
• Bonuses and allowances
  
  

5. Provide Full Cost-to-Company Breakdown

Includes:

• Gross salary
  
• Employer social security
  
• Employer EOBI
  
• Estimated tax
  
• EOR fee
  
  

6. Draft Pakistan-Compliant Contract

Contract includes:

• Duties and title
  
• Salary and pay cycle
  
• Working hours
  
• Leave entitlements
  
• Disciplinary process
  
• Termination and notice
  

Standing Orders compliance is mandatory.

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7. Register Employee

EOR registers with:

• FBR payroll system
  
• EOBI
  
• Provincial social security
  

Late registration is non-compliance.

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8. Set Up Workplace Policies

EOR issues:

• Code of conduct
  
• Disciplinary process
  
• Leave policy
  
• Remote-work policy (if applicable)
  
  

9. Immigration Workflow (If Needed)

EOR manages:

• Work visa
  
• Labour department approvals
  
• Start-date coordination
  
  

10. First Payroll and Filings

EOR processes:

• Salary
  
• FBR tax filing
  
• EOBI and social security
  
• Payslip issuance
  
  

11. Ongoing Compliance and Termination

EOR manages:

• Salary changes
  
• Contract updates
  
• Inspections
  
• Termination process
  
• Labour-court representation
  

Most employer losses happen after termination.

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Build Your Pakistan Team with Bolto EOR

Expanding into Pakistan is not just about hiring, it is about handling FBR, EOBI, and provincial labour law correctly.

Bolto’s Employer of Record model absorbs:

• Standing Orders complexity
  
• FBR and payroll exposure
  
• EOBI and social security
  
• Labour-court and inspection risk
  

So you can scale in Pakistan without becoming the legal employer.

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Full Legal Employer Coverage in Pakistan

Bolto becomes the legal employer before:

• FBR
  
• Provincial labour departments
  
• Social security institutions
  
• EOBI
  
• Labour courts
  

Bolto manages:

• Contracts and policies
  
• Payroll and statutory filings
  
• Leave and attendance
  
• Audit and inspection response
  
• Termination execution
  

You manage work. Bolto manages legal risk.

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Built for Fast Entry and Clean Exit

With Bolto EOR:

• Hire in weeks
  
• Avoid Pakistani company formation
  
• Skip FBR and labour registration
  
• Exit without liquidation
  

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Transparent Cost Structure

Bolto provides:

• Salary and statutory breakdown
  
• Employer and employee contributions
  
• Fixed EOR fees
  
  

End-to-End Employee Lifecycle Management

Bolto manages:

• Contract drafting
  
• Payroll and FBR
  
• EOBI and social security
  
• Leave and benefits
  
• Discipline and termination
  
• Labour-court defense
  

You never deal directly with Pakistani labour authorities.

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Designed for Risk-Controlled Growth in Pakistan

Pakistan penalizes:

• Late FBR filings
  
• Missing EOBI
  
• Invalid termination
  
• Poor documentation
  

Bolto enables growth without inheriting labour-court and inspection risk.