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Employment contracts

We can help you draft permanent, temporary (fixed-term), and badlis employment contracts in compliance with key statutes, including the Shops and Establishments Ordinance (The Ordinance), 1969, and the Industrial and Commercial Employment (Standing Orders) Ordinance, 1968, the Industrial Relations Act, 2012, and relevant provincial laws. 

Background checks

Some hires may require identity verification, education and employment history checks, criminal record searches, and credit reports.

Talent discovery

Through our local network, we can connect you with pre-vetted candidates in industries like technology, finance, engineering, and manufacturing.

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Salary structuring

We can help you design salary packages with fixed and variable components, aligned with statutory requirements and social security contribution limits.

Taxes

Employer obligations may include withholding taxes for non-residents (15% on dividends, 10% on interest, 15% on royalties, and 15% on technical service fees) and meeting filing deadlines to avoid penalties of 0.1% per day.

Employee income tax is applied on a progressive scale from 0% to 35%, with sales tax at 17% for goods and 13–16% for services.

Payouts

Employees are paid in Pakistani Rupees (PKR) via bank transfer, with payslips generated monthly and payroll cycles aligned with filing deadlines.

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Social Security contributions

Employers are required to register and contribute towards Employees’ Old-Age Benefits and Employees’ Social Security Institution,s subject to meeting of employee number and salary threshold requirements. Setting up of Provident Fund is discretionary. Employers are required to have Insurance for employees. Workers are also entitled to gratuity as per their tenure. 

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Employment Laws

Pakistan is a federal republic that consists of four provinces – Balochistan, Khyber Pakhtunkhwa, Punjab, and Sindh – and the Federal Capital Territory (Islamabad). Employment & Labour Laws in Pakistan are governed by multiple federal and provincial laws including Industrial Relations Act 2012; Industrial and Commercial Employment (Standing Orders) Ordinance 1968; Shops And Establishments Ordinance (The Ordinance), 1969; Industrial Relations Act 2012; Payment of Wages Act 1936; Protection against Harassment of Women at the Workplace Act 2010; Minimum Wages Ordinance 1961; The Factories Act, 1934; Employees’ Old-Age Benefits Act 1976; Provincial Employees’ Social Security Ordinance 1965; and Pakistan Occupational Health and Safety Act 2018. Provincial acts, such as the Sindh, Punjab, and Khyber Pakhtunkhwa labor laws, also apply depending on the employee’s location.

Worker classification & employment contract

Employees are classified into categories such as permanent, probationer, temporary (fixed-term), contract worker, apprentice, or badli (alternate). Written employment contracts must clearly define the role, wages, benefits, probation, and termination terms in line with the applicable laws.

Record keeping & documentation

Employers are required to maintain proper employment records, wage registers, and statutory filings to remain compliant with inspections or audits.

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Annual leaves

Under federal and provincial laws (except those of Balochistan), employees who have completed 12 months on the job have the right to avail 14 days of annual leave with full wages. In Balochistan, workers who have completed 12 months on the job have the right to avail 20 days of annual leave with full wages, while non-managers have the right to avail 14 days of annual leave with full wages.

Sick leaves

Under federal and provincial laws, employees are entitled to sick leave for a total period of eight days with full wages in a year. Such leave, if not taken, may be carried forward, but the total accumulation of such leave must not exceed 16 days.

Maternity leave

Maternity leave varies for female employees in different provinces. In Punjab and Khyber Pakhtunkhwa, it is 12 weeks, in Baluchistan, it is 14 weeks + 4 weeks in case of medical complications, and 4 weeks in case of miscarriage or termination of pregnancy. In Sindh, it is 16 weeks, 1 week in case of miscarriage, 4 weeks in case of stillborn, and 4 weeks in case of medical complications.

Public Holidays

Under federal and provincial laws, employees are also entitled to one holiday per week and 10 festival holidays per year, as notified by the employer at the beginning of the year. This is the case in every province except Khyber Pakhtunkhwa, where employees are allowed holidays on all days declared by the provincial government to be festival holidays

Casual Leave

Under federal and provincial laws (except Balochistan), employees are entitled to a total of 10 days of casual leave with full wages in a year. However, in Balochistan, employees are entitled to a total of 10 days of casual leave with full wages in a year.

leave policies

Notice periods & documentation

Under federal and provincial laws (except those of Balochistan), for permanent workers and non-managers, an employer is bound to give at least one month of prior notice. In the case of permanent employment, an employer is bound to give at least one month of prior notice

Severance & final payouts

There is no legal requirement for the employer to give an end-of-service gratuity or any other severance pay to employees other than workers. However, if there is a requirement to give severance pay under the employment contract or any other internal policy governing non-workers, the employer is bound to pay such a gratuity as laid down therein.

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Payoneer Workforce Management’s Employer of Record in Pakistan allows businesses to hire employees without setting up a local entity. The service covers employment contracts, payroll, statutory contributions, and compliance with Pakistan’s labor laws while you manage the employees’ day-to-day work.

EOR pricing starts at $199/month per employee. Contractor management starts at $19/month.

No. Payoneer Workforce Management acts as the legal employer, enabling you to hire and pay employees in Pakistan without incorporating locally.

Statutory entitlements include social security contributions, paid public holidays, annual leave, and maternity/paternity leave as applicable. Additional benefits can be offered based on company policy.

Yes. The Employer of Record model is recognized in Pakistan, with the EOR becoming the official employer for compliance, payroll, and HR administration while you retain control over daily operations.

Onboarding timelines depend on document readiness and approvals, but we can typically prepare employment contracts, payroll, and statutory registrations within 3 to 5 business days.

Written employment contracts are required and must include job responsibilities, wages, benefits, probation, leave entitlements, and termination terms, in line with applicable labor laws.

The information on this page reflects the details available at the time of publication. For the most up-to-date information, please consult a Payoneer Workforce Management representative or account executive. Skuad Pte Limited (a Payoneer group company) and its affiliates & subsidiaries shall provide EoR, AoR, and contractor management services.

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