Employer Of Record in Pakistan
We make it easy and painless to expand your business into Pakistan. Forget about dealing with local regulations, confusing tax laws and international payroll management. We take care of all that so you don't have to.
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How we can help you expand in Pakistan
As your EOR in Pakistan we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary.
Your candidate is hired by a PEO in Pakistan provider in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. Shortly after, your new employee will be working for you, just like any other member of your team.
Expand to Pakistan with Serviap Global
Through our PEO and EOR services, you can hire qualified talent in your industry without the trouble of opening your own legal entity.
In just a few days, you can easily and safely build a presence in Pakistan being sure that your staff will be hired in compliance with labor and tax regulations.
Table of Contents
Pakistani Rupee (PKR)
Urdu, English, Punjabi
Pakistan Country Facts
Pakistan offers diverse people, cultures, and landscapes. The country has intricate mazes of mountain ranges, valleys, and the incredibly even surface of the Indus River’s fertile plain.
Family organization is strongly patriarchal. It’s common to live with extended family. The people themselves are friendly, helpful, and humble.
Post-COVID Pakistan has managed steady economic recovery while maintaining internal and external stability. Pakistan overall is considered a developing/emerging economy, tending toward some progressive tendencies in recent years.
The Importance of Small and Medium-sized Companies
The government put in place a system of support for SMEs. It’s called the National SME Policy Action Plan 2020. The support measures have sparked the resumption of business activities. The nation’s SMEs are critical to the country’s economic growth, technological innovation, and promoting economic renewal.
The population is growing; many of its people are in the 15-29 year age range. Research organization, The National Institute of Population Studies (NIPS), reports the government has launched programs to boost employment opportunities for Pakistan’s up and coming population. These programs are based on the modern understanding that skills are necessary to maintain a modern economy.
Pakistan’s root beliefs are that its people should have an Islam-based existence, therefore Islam is practiced by almost all Pakistanis. However, it’s common to speak English when conducting business in this country.
Global equity markets are rebounding. In 2020, the Pakistan Stock Exchange (PSX) also was named the best Asian stock market across the world. Institutions of higher education will be a driving force to continue the growth of Pakistan’s science and technology sectors and opportunities.
Key Sectors of the National Economy
Some key sectors of the economy are:
- Manufacturing of textiles, pharmaceuticals, and automobiles
Pakistan enjoys an abundance of human resources as well as natural commodities. There’s a focus in the country to invest in human talent with skill development programs to ensure growth and decrease unemployment. Pakistan’s government is focusing on ways to nurture opportunities for financial improvement, to raise
Pakistan’s position on global markets.
Prominent Cities for Business
Karachi is Pakistan’s largest city and the twelfth largest city in the world. It’s also Pakistan’s premier
industrial and financial center. It is widely viewed as one of Pakistan’s most secular cities.
Lahore is one of Pakistan’s wealthiest cities. It’s home to the Karachi Expo Centre. As it is in the middle of the commercial Capital of Pakistan, it enjoys easy access to the Middle East and other Asian Countries.
An extremely important industrial center in Pakistan, it has a wide range of manufacturing and industrial companies, factories, and businesses of every size.
Recently, mobile cellular subscribers (number of active SIMs) in Pakistan hit 182 million. At the same time, broadband (BB) subscribers reached 100 million.
Facilities for Foreign Investment
Pakistan’s government is focused on an economic vision. The main goal is to reach sustainable economic growth by reducing the cost of doing business in the country, increasing investment, boosting productivity and improving overall efficiency. Pakistan is on a path to liberalizing the economy, for example, they are privatizing government corporations to attract foreign investment into the country
Business Culture in Pakistan
- Plan Ahead
Your Pakistani business counterparts will expect any meetings to have a month’s notice before they take place. They’ll also want to know who they’ll be meeting with, right down to details of positions, titles, and work responsibilities.
Most often reserved for members of the same sex. Men tend to shake hands. Once a stronger relationship develops, hugging is also common.
Women generally greet each other with a hug and a kiss. Expect to share some small talk about how the individual and their family are doing before getting down to business. You’ll also need business cards to exchange, but only after the initial introductions are done.
- Muslim Customs
It’s extremely important to learn about local customs specifically related to the Muslim culture.
Pakistan Gastronomy: regional and traditional cuisines
Pakistani cuisine is diverse and flavorful, with a nearly unending number of special herbs and spices available.
Each traditional dish is connected to the history of a particular province.
Chicken and beef, along with a mixture of delicious yellow rice. It is most commonly served with tomatoes, potatoes, and lemons.
- Aloo Keema
This dish may be served in every home in Pakistan. It’s a blend of potatoes, mutton, or chicken in a curry sauce. Simple yet delicious.
The country’s favorite dessert. It’s a rice pudding that includes mixed nuts, a bit of savory saffron, and cardamom.
|Country||Islamic Republic of Pakistan|
|Num. States / Province||4 provinces|
|Principal Cities||Karachi, Lahore, Faisalabad, Rawalpindi|
|Language||Urdu, although business is conducted using English|
|Local Currency||Rupee Rs|
|Thousands Separator Format||999,999,999.99|
|Country Dial Code||+92|
|Time Zone||PKT UTC+05:00 hours ahead of Coordinated Universal Time|
|Border Countries||Afghanistan, China, India, and Iran|
|Continental surface||796,095 km2|
|Fiscal Year||July 1 – June 30|
|Minimum Wage||15,000 Pakistani rupees per month (approximately $85 USD)|
Taxpayer Identification Number Name in the country
TIN – National Tax Number (NTN) CNIC – for individuals
AOP – for companies and associations
|Current President||Arif Alvi|
What you need to know about employing personal in Pakistan:
Laws and Agencies that regulate labor relationships
|The Constitution of Pakistan||Became effective in 1973. Pakistan’s Constitution aims for a democratic State based on principles of Islam.|
The Constitution of Pakistan has provisions specific to labor rights:
Prohibitions against any forced or child labor The right to form unions
Citizens’ rights to enter any lawful profession or trade
Equal rights before the law prohibiting discrimination of sex alone
The overall tax law of the country, which was established in three parts.
Tax Laws (Third Amendment) Order of 2021
|Social Security||The employer pays in 5%, and the employee pays in 1%|
Key Tax and Labor Authorities
|Federal Board of Revenue (FBR)||This governs revenue in this country.|
|The Federal and Provincial Governments.||Labor Law is governed by both of these.|
|Contracts||The Standing Orders Ordinance 1968 says employers must provide an employee with an employment contract.|
|The International Labor Organization||They are members|
8 hours per day
48 hours in a week
Labor law dictates contracts must contain:
- Job description
- Required probationary Period
- Notice of termination of employment
- Whether employee services can be transferred to other departments
- Confidentiality agreements may be part of employment contracts depending on the employer
- Leaves, benefits that adhere to labor laws
Legal Benefits in Pakistan
|Minimum Wage||15,000 Pakistani rupees per month (approximately $85 USD)|
|Where a worker in a non-seasonal factory works for more than nine hours in a day, or above 48 hours in any week, overtime pay will be at twice the rate of regular pay.|
Mandatory if the company is making a profit
Depending on profit margin, bonuses are paid at a rate of 15-30% of one
|Vacations or PTO||An employee is entitled to 14 calendar days of paid annual leave after the completion of 12 months of continuous service.|
Leaves of Absence
• Sick leave
121 days (in a calendar year) for most illnesses and 365 days (in a calendar year) in case of cancer or tuberculosis.
• Maternity leave
Women can take twelve weeks of maternity leave with full pay. It’s required that women take six weeks after the birth.
Employers Contribution or Labor Cost
In Pakistan an employer can estimate a labor cost of about 20% on top of the gross salary
Annual Taxable Income
|Over this amount||Not over this amount||Tax % on Excess|
|Rs. 600,000||Rs. 1,200,000||5% of the amount exceeding Rs. 600,000|
|Rs. 1,200,000||Rs. 1,800,000||Rs. 30,000 plus 10% of the amount exceeding Rs. 1,200,000|
|Rs. 1,800,000||Rs. 2,500,000||Rs. 90,000 plus 15% of the amount exceeding Rs. 1,800,000|
|Rs.2,500,000||Rs. 3,500,000||Rs. 195,000 plus 17.5% of the amount exceeding Rs. 2,500,000|
|Rs. 3,500,000||Rs. 5,000,000||Rs. 370,000 plus 20% of the amount exceeding Rs. 3,500,000|
|Rs. 5,000,000||Rs. 8,000,000||Rs. 670,000 plus 22.5% of the amount exceeding Rs. 5,000,000|
|Rs. 8,000,000||Rs. 12,000,000||Rs. 1,345,000 plus 25% of the amount exceeding Rs. 8,000,000|
|Rs. 12,000,000||Rs. 30,000,000||Rs. 2,345,000 plus 27.5% of the amount exceeding Rs. 12,000,000|
|Rs. 30,000,000||Rs. 50,000,000||Rs. 7,295,000 plus 30% of the amount exceeding Rs. 30,000,000|
|Rs. 50,000,000||Rs. 75,000,000|
Rs. 13,295,000 plus 32.5%
of the amount exceeding Rs. 50,000,000
|Rs. 75,000,000||Rs. 21,420,000 plus 35% of the amount exceeding Rs. 75,000,000|
Corporate Tax Rates
|Taxable Gross Income||Tax Rate|
|Flat depending on type of company||21-35%|
CNIC Benefits/Disability Certificate entitles holders to discounts in utilities, free travel on public transportation and deep discounts on other modes of transportation, their income tax waived, and free hospital treatment.
In Pakistan, the dates of Muslim religious festivals are subject to appearance of moon and change every year.
|1 January||Bank Holiday|
|5 February||Kashmir Day|
|23 March||Pakistan Day|
|4 April||Zulfikar Ali Bhutto Death Anniversary|
|1 May||Labour Day|
|1 July||Bank Holiday|
|10-12 July||Eid ul-Azha|
|14 August||Independence Day|
|11 September||Urs of Shah Abul Latif Bhitai|
|9 October||Eid Milad-un-Nabi|
|25 December||Birthday of Quaid-e-Azam Muhammad Ali Jinnah & Christmas Day|
|27 December||Benazir Bhutto’s Death Anniversary|
The Labor Code outlines rules for termination of an employment contract:
|Type of Termination||Brief Description|
The employer must prove that the dismissal is justified or reasonable.
Serious misconduct triggers just cause—actions such as fraud, insubordination, theft, assault, or excessive unexplained absences.
Dismissal without warning happens if an employee is not performing properly, the employer must explain what’s going poorly and possible remedies.
There has to be a reasonable amount of time for the employee to improve before they can be dismissed.
Either the employer or employee can end an employment contract. A one- month notice is required.
An employee may resign from employment to take a better job opportunity.
Other forms of compensation upon termination include
An employee terminated for misconduct is not due to any severance. Otherwise:
Length of Employment
For each year of employment
30 days’ wages
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