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Pakistan EOR & PEO

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Hire in Pakistan

Pakistan is one of the largest countries in the world with a population of 236.17 million people. Its $370.9 billion GDP is expected to increase by 2% in 2024.

With a wealth of software development and IT expertise, and reasonable labor costs, Pakistan is a popular location for international hiring. Learn how Horizons’ Pakistan Employer of Record (EOR) solution can enable you to hire employees in Pakistan quickly, compliantly, and at a minimal cost.

Facts & Stats

EOR Platform

Hire in Pakistan, and pay employees through our platform or app.

EOR Cost

Our Pakistan EOR solution is the most affordable on the market.

Time-to-hire

Fast Pakistan onboarding, hire in as little as 12 hours.

Contracts

We draft compliant Pakistan labor contracts.

Local benefits

We manage all Pakistan “Five Insurances” mandatory benefits.

180+ Countries

It doesn’t stop with Pakistan — we hire employees globally.

hire employees in Pakistan

What Is a Pakistan EOR?

An Employer of Record (EOR) in Pakistan is a business that is able to recruit and hire local employees on behalf of other companies. As the EOR is the firm doing the actual hiring, their client companies don’t need to own entities in Pakistan to work with  employees there. The EOR hires employees on behalf of their clients and then manages their human resources (HR) functions on a long-term basis. These functions typically include payroll, benefits, and employment compliance.

Another term used in Pakistan for an Employer of Record is a Professional Employer Organization (PEO).

Save Money And Time with A Pakistan EOR

What Are the Benefits of a Pakistan EOR?

The benefits of working with a Pakistan EOR to hire employees in-country include:

  1. No entity needed: Setting up a legal entity in Pakistan can be time-consuming and costly. Instead, an EOR acts as the sole legal employer, allowing foreign firms to hire Pakistan-based talent. 
  2. Fast recruiting: Trying to hire workers in a foreign job market can be next to impossible for foreign firms on their own. As an EOR company with in-house recruitment, Horizons has extensive contacts and talent pools, EORs can find employees easily and quickly hire and onboard them for their clients.
  3. Affordability: Pakistan-based workers tend to be highly-skilled and educated, but a low cost of living ensures salaries are affordable for most firms. The employer also has to pay just 5-10% of the worker’s salary in contributions to social security, far less than in most countries in the world.
  4. Compliance with local laws: Pakistan, like any country, has its own tax and labor laws to which all employers must conform. It’s unlikely and nearly impossible that a foreign company would be able to fully comply with all of these statutes correctly, especially as they change over time. Instead, it’s the EOR’s responsibility to use its staff’s knowledge and experience to ensure complete compliance at all times. This saves time and money for the client by protecting it from fines and legal actions.
  5. Language skills: While Urdu is the official language of the state, Punjabi is much more widely spoken at 50% of the population. At the same time, English is a co-official language with Urdu, and though it is spoken as a first language by only a small minority of people, it’s taught in schools and widely used in business. These language skills can make working with Pakistan-based employees easy and enable cross-border communication with other partners and clients.
Horizons is Best IN Class

Why Choose Horizons?

Horizons stands out as a Pakistan EOR through:

  1. A strong regional presence in South Asia, meaning local account managers on hand to deal with any issues.
  2. Client-focused infrastructure. Horizons won’t oversell you on products and services you don’t need. Horizons offers the easiest platform to compliantly hire and pay people worldwide.
  3. Cost-effective solutions. At $299 per employee, per month, no EOR in Pakistan offers a better price. The cost is 100% transparent (onboarding, offboarding, deposit, no extra charges).
  4. A customer-first culture. Horizons is an efficient bootstrapped company. It is not an externally-funded company burning investor cash to aggressively acquire new clients. Horizons is the only EOR that grows with its customer, reflecting the level of care and personal attention provided to each customer. Horizons will carefully advise on the best setup in each country: the type of contract needed, how to structure your benefits, and how to offboard a person while minimizing the risk of conflicts and extra cost
  5. A long-term partnership. Horizons is the only EOR platform with a recruitment arm — a direct response to client demand. If any employee is leaving, or if our clients want to explore a new country, Horizons can recruit new candidates directly for the client.  Horizons is:
    • The only EOR doing this in-house — no subcontracting
    • The only EOR doing this without a retainer — clients are only charged upon success
    • The only EOR charging just a 2% fee per month
Step-by-step Pakistan EOR

How Does a Pakistan EOR Work?

When you engage a Pakistan EOR, it will:

  1. Hire your Pakistan employees. The Pakistan EOR becomes the legal employer of your employees in Pakistan, taking care of legal and HR responsibilities. This leaves you to focus on day-to-day company operations.
  2. Manage employment contracts and onboarding. The EOR assists in drafting compliant Pakistan labor contracts, including terms on salary, benefits, working hours, and termination procedures. They also manage the onboarding process, ensuring that employees are legally registered and understand their employment terms.
  3. Process payroll and handle employment taxes. The Pakistan EOR takes care of payroll processing, ensuring accurate calculation of wages, social benefits, and taxes according to Pakistan regulations. They also handle tax filings and ensure compliance with local tax laws, reducing the risk of penalties for non-compliance.
  4. Administer benefits. The Pakistan EOR can provide employees with access to competitive benefits packages, including health insurance, pension schemes, and other perks. Since EORs pool employees from multiple companies, they often can negotiate better rates for these benefits.
  5. Take care of exit procedures. If an employment relationship needs to end, the EOR handles the termination process in accordance with Pakistan labor law, including severance payments and the final settlement.

To summarize, when your company engages a Pakistan EOR, your business is able to focus on strategic objectives and operational needs within the Pakistan marketplace, with the EOR taking care of HR functions and legal compliance.

stay compliant with Pakistan labor laws

Labor Laws

When you work with a Pakistan Employer of Record, that service provider is the sole legal employer of your employees. As such, it is responsible for maintaining compliance with all the relevant labor laws in Pakistan. At the federal level, this includes the Minimum Wages Ordinance of 1961, the Old-Age Benefits Act of 1976, and the Industrial Relations Act of 2012, among others. However, provinces have different laws that may also need to be considered. It’s useful for companies to have some familiarity with these laws to know what to expect they’ll need to provide for their workers. 

Employment contract types

Contracts in Pakistan can be permanent (open-ended) or fixed-period. Every legal contract needs to detail the employee’s role and responsibilities, working hours, probationary period, paid leave, and other benefits. It also must include termination conditions and give the details of salary and the salary payment schedule.

Project-based

Probationary period

No probationary period

Termination

At completion of the project

Severance

Not required, but may be offered

Fixed-term

Probationary period

3-6 months

Termination notice period

None, unless specified in contract

Severance

Not required unless specified in the contract

Indefinite

Probationary period

3-6 months

Termination notice period

30-90 days

Severance

1 month salary per year of service

Working hours in Pakistan

Workers in Pakistan normally work eight or nine hours a day to a maximum of 48 hours per week. However, these hours include a paid lunch break and breaks for prayer during the day for a total of one hour. During the holy month of Ramadan, however, workers are normally fasting during daylight hours, and employers must reduce their work to a maximum of 6 hours per day.

Employees cannot work more than 12 hours/day or three extra overtime hours a day. These overtime hours are mandatory and must be worked according to the needs of the employer. However, they are compensated at double the rate of regular pay and triple on holidays.

Overtime must be compensated in the following way:

For a regular workday

150% of the standard hourly rate (also known as ‘time and a half’)

For a rest day

200% of the standard hourly rate, or a day off (also known as ‘double time, or a day in lieu’)

For a statutory holiday

300% of the standard hourly rate (also known as ‘triple time’)

Pakistan has a healthy mix of national and religious holidays that are decided on annually. This holiday schedule normally totals around 16 days, and workers must be paid for these holidays. If they fall on weekends or other days off, workers are compensated with time off.

 

DateHoliday name
1 Jan, 2024New Year’s Day
4 Feb, 2024Kashmir Day
23 Mar, 2024Pakistan Day
10 Apr, 2024Eid-ul-Fitr
11 Apr – 13 AprEid-ul-Fitr Holiday
1 May, 2024Labor Day
17 Jun, 2024Eid al-Adha
18 Jun to 19 JunEid al-Adha Holiday
16 Jul, 2024Ashura (Tentative Date)
17 Jul, 2024Ashura Holiday (Tentative Date)
14 Aug, 2024Independence Day
16 Sep, 2024Eid Milad un-Nabi (Tentative Date)
9 Nov, 2024Iqbal Day
25 Dec, 2024Quaid-e-Azam Day

Paid time off

Pakistani workers are entitled to a minimum of 14 days off per year as long as they have worked for one year for their employer. These days can, however, include public holidays, so if a worker takes paid leave over a national holiday, that day is not counted twice. Workers are allowed to accumulate as many as 14 days of paid leave, so employers may grant a period of not more than 28 days to some workers.

Under 1 year of employment

no leave entitlement

1-10 years of employment

14-18 days of paid leave annually

10-20 years of employment

18 days of paid leave annually

20+ years of employment

18 days of paid leave annually

Sick leave in Pakistan

Employees can take as many as 16 days per year of sick leave. On these days, they receive half their regular pay but may need a medical certificate. For serious, long-term illnesses, a worker may be entitled to up to 121 days off, normally paid at 75% of their regular pay.

Less than 6 months of sick leave

Under 1 year of employment

No official limit

1-10 years of employment

No official limit

10-20 years of employment

No official limit

20+ years of employment

No official limit

Over 6 months of sick leave

Under 1 year of employment

No official limit

1-3 years of employment

No official limit

3+ years of employment

My official list

In order for employees to receive the full wages due to them, workers must present a valid medical certificate from a certified doctor to their employer.

Maternity leave in Pakistan

According to the Maternity and Paternity Leave Bill of 2023, maternity leave has increased from six weeks to 180 days, and mothers are paid their full salary during this period. For their second child, however, this period is reduced to 120 days and to 90 days for their third child. Fathers can now take 30 days of paid leave for each of their first three children but no leave after that.

Annual leave in Pakistan

In Pakistan, annual leave entitlements are governed by provincial Shops and Establishments Ordinances, which outline the rights of employees regarding paid time off from work. Typically, employees are entitled to between 14 to 18 days of annual leave per year, depending on their length of service and the specific policies of their employer. Annual leave accrues gradually throughout the year, usually based on the duration of continuous service with the employer. Employers are required to provide employees with their normal salary or wages during the period of annual leave, including any applicable allowances or benefits

Termination & severance in Pakistan

Employers in Pakistan must give one month’s notice before terminating workers, and this notice must be given on paper. In some industries and provinces, a longer period is required.  Employers cannot, however, dismiss female workers while they are on maternity leave. Workers can also resign by providing employers with 30 days’ notice.

Workers are entitled to severance pay unless terminated for misconduct. They receive pay equivalent to 30 days’ wages for every year they worked for an employer. This pay is also given if they worked at least more months after their last full year.

Pakistan's compulsory social security contributions

The social security system in Pakistan includes payments into Employees’ Old Age Benefits, Provincial Employer Social Security, and Worker’s Children Education schemes. Employees pay just 130 PKR/month into Old Age Benefits, while employers pay 780 PKR/month. Employers also contribute 6% of the workers’ salaries to social security, up to a maximum of 16,200 PKR.

hassle-free Pakistan compensation & benefits

Compensation & Benefits

Pakistan compensation laws

In September 2023, the national minimum wage was increased to 32,000 Pakistani Rupees (PKR) per month (approximately 115 USD/month), which is far below the world average. Wages vary widely across the country, but on average, Pakistanis make between 80,000 and 90,000 PKR/month (about 285-320 USD/month). Skilled workers may make more, but these wages are still far below global averages.

13 month salary in Pakistan

Pakistan does not have a mandated 13th-month salary. However, employers with more than 20 employees are required to pay them bonuses if they’ve worked for more than 90 consecutive business days. These bonuses may represent up to 15-30% of the company’s profits.

Social security for Pakistani nationals

Employees pay 130 PKR/month into Old Age Benefits, while employers are required to pay 780 PKR/month. Employers also contribute 6% of the workers’ salaries to social security, which is a maximum of 16,200 PKR.

Hire borderless talent with Horizons

Hire in Pakistan in 24h without your own local entity.

With Horizons, you get quick service, transparent pricing, and expert support.

Frequently asked questions

The biggest advantage of working with an EOR in Pakistan is that this enables you to hire Pakistan employees without needing to set up an entity. This will save you significant time and effort. The EOR also manages your employees and ensures compliance with local laws. Plus, it will help you to recruit quickly so you can have Pakistani employees on your payroll in a matter of days.

While foreign companies would have to wade through dozens of acts and ordinances to make sense of Pakistan labor law, expert EORs, like Horizons, have it covered. They have complete knowledge of these laws and experience complying with them to ensure that employees are treated fairly and equitably. They also protect your rights as an employer.

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