Overview

Capital
Islamabad
Currency
Pakistan Rupee
Date Format
dd/mm/yyyy

calendar icon Public holidays calendar

Taxes

Employer
6% (7% of monthly payroll up to 5,000 rupees in Balochistan province) - Healthcare
5% - Pension
Employee
40 rupee flat-rate each month - Healthcare
1% - Pension
0% - PKR 0 -400,000
PKR 1,000 - PKR 400,000 - 800,000
PKR 2,000 - PKR 800,000 - 1,200,000
5% of the amount exceeding PKR 1,200,000 - PKR 1,200,000 - 2,500,000
PKR 65,000 + 15% of the amount exceeding PKR 2,500,000 - PKR 2,500,000 - 4,000,000
PKR 290,000 + 20% of the amount exceeding PKR 4,000,000 - 4,000,000 - 8,000,000
PKR 1,090,000 + 25% of the amount exceeding PKR 8,000,000 - PKR 8,000,000

Minimum Wage

General

Minimum wage is 15,000 Pakistani Rupees per month. 16,200 in the province of Sindh.

Working Hours

General

Normal working hours are a maximum of 9 hours a day and 48 hours a week. Anything over this is considered overtime.

Overtime

Overtime pay in Pakistan is double the rate of employees’ regular pay. During holidays employees receive triple the pay rate.

VAT

General

17%

Mandatory Benefits

Pension Fund

Contribution rates are: • Employer – 5% • Employee – 1%

Social Security

Social insurances cover old age, disability and survivor benefits, sickness, maternity and work-related injury.

Payroll

Payroll Cycle

Wages can be paid on daily, weekly, bimonthly, or monthly basis. The wage period cannot exceed one month.

Termination

Termination Process

A written letter should be provided when terminating a contract and reasoning for the termination must be sufficient.

Advance Notice

Both employee and employer should provide a months’ time notice. Advanced notice is not required for temporary workers. If advance notice is not provided, a monthly salary in its lieu shall be provided.

Severance Pay

When employees are discharged from work, they are given severance pay. The pay amounts to 30 days’ wages for each completed year of service. Employees do not receive severance pay if they are dismissed for misconduct.