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.

Accelerate your growth into Pakistan
Compliantly and hassle-free

At Serviap Global we handle all employee onboarding, payroll, compliance, risk, mitigation and benefits, so you can focus on what matters most – your business.

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

Quick Facts

Currency:
Pakistani Rupee (PKR)

Capital:
Islamabad

Payroll Cycle:
Bi-Monthly/Monthly

Language(s):
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.

The Economy

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.

Population Characteristics

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.

Economic Opportunities

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:

  • Services
  • Agriculture
  • Manufacturing of textiles, pharmaceuticals, and automobiles
  • Mining

Human Talent
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
    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
    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.
  • Faisalabad
    An extremely important industrial center in Pakistan, it has a wide range of manufacturing and industrial companies, factories, and businesses of every size.

Technological Ecosystem

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.
  • Greetings
    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.

  • Biryani
    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.
  • Kheer
    The country’s favorite dessert. It’s a rice pudding that includes mixed nuts, a bit of savory saffron, and cardamom.

General Highlights

Year2022
CountryIslamic Republic of Pakistan
CapitalIslamabad
Num. States / Province4 provinces
Principal CitiesKarachi, Lahore, Faisalabad, Rawalpindi
LanguageUrdu, although business is conducted using English
Local CurrencyRupee Rs
Major ReligionIslam
Date Formatdd/mm/yyyy
Thousands Separator Format999,999,999.99
Country Dial Code+92
Time ZonePKT UTC+05:00 hours ahead of Coordinated Universal Time
Population202 million
Border CountriesAfghanistan, China, India, and Iran
Continental surface796,095 km2
Fiscal YearJuly 1 – June 30
VAT %17%
Minimum Wage15,000 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 PresidentArif Alvi

What you need to know about employing personal in Pakistan:

Laws and Agencies that regulate labor relationships

LawsBrief Description
The Constitution of PakistanBecame effective in 1973. Pakistan’s Constitution aims for a democratic State based on principles of Islam.

 

 

Labor Code

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

 

Tax Code

The overall tax law of the country, which was established in three parts.

Tax Laws (Third Amendment) Order of 2021

Social SecurityThe 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.

Labor Contracts

ContractsThe Standing Orders Ordinance 1968 says employers must provide an employee with an employment contract.
The International Labor OrganizationThey are members

 

Work Hours

8 hours per day

48 hours in a week

Basic Requirements

Labor law dictates contracts must contain:

  • Job description
  • Salary
  • 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

Payroll

Legal Benefits in Pakistan

Minimum Wage15,000 Pakistani rupees per month (approximately $85 USD)

Wages

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.

Bonus

Mandatory if the company is making a profit

Depending on profit margin, bonuses are paid at a rate of 15-30% of one

month’s pay.

Vacations or PTOAn 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 amountNot over this amountTax % on Excess
Rs. 600,000Rs. 1,200,0005% of the amount exceeding Rs. 600,000
Rs. 1,200,000Rs. 1,800,000Rs. 30,000 plus 10% of the amount exceeding Rs. 1,200,000
Rs. 1,800,000Rs. 2,500,000Rs. 90,000 plus 15% of the amount exceeding Rs. 1,800,000
Rs.2,500,000Rs. 3,500,000Rs. 195,000 plus 17.5% of the amount exceeding Rs. 2,500,000
Rs. 3,500,000Rs. 5,000,000Rs. 370,000 plus 20% of the amount exceeding Rs. 3,500,000
Rs. 5,000,000Rs. 8,000,000Rs. 670,000 plus 22.5% of the amount exceeding Rs. 5,000,000
Rs. 8,000,000Rs. 12,000,000Rs. 1,345,000 plus 25% of the amount exceeding Rs. 8,000,000
Rs. 12,000,000Rs. 30,000,000Rs. 2,345,000 plus 27.5% of the amount exceeding Rs. 12,000,000
Rs. 30,000,000Rs. 50,000,000Rs. 7,295,000 plus 30% of the amount exceeding Rs. 30,000,000
Rs. 50,000,000Rs. 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 IncomeTax Rate
Flat depending on type of company21-35%

Disability

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.

Public Holidays

In Pakistan, the dates of Muslim religious festivals are subject to appearance of moon and change every year.

DateHoliday Name
1 JanuaryBank Holiday
5 FebruaryKashmir Day
18 MarchHoli
23 MarchPakistan Day
4 AprilZulfikar Ali Bhutto Death Anniversary
1 MayLabour Day
3-5 MayEid-ul-Fitr
1 JulyBank Holiday
10-12 JulyEid ul-Azha
7-8 AugustAshoora
14 AugustIndependence Day
11 SeptemberUrs of Shah Abul Latif Bhitai
9 OctoberEid Milad-un-Nabi
25 DecemberBirthday of Quaid-e-Azam Muhammad Ali Jinnah & Christmas Day
27 DecemberBenazir Bhutto’s Death Anniversary

Termination

The Labor Code outlines rules for termination of an employment contract:

Type of TerminationBrief Description

Justified Dismissal

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.

Unjustified Dismissal

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.

Voluntary Resignation

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

Severance Amount

For each year of employment

30 days’ wages

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