Payroll and labour compliance
Pakistan payroll compliance, built in
Switch on the Pakistan country pack and every payroll run works out income tax on salary with the FBR slabs, EOBI and provincial social security, then builds the statements and bank files you upload. The rates ship as a starting point: you can override any figure, and you should confirm them with your tax adviser.
- FBR income tax
- EOBI
- PESSI (Punjab)
- SESSI (Sindh)
- KPESSI (KP)
- BESSI (Balochistan)
- Provincial minimum wage
- Gratuity
Is BusinessHRM payroll compliant with Pakistani law?
BusinessHRM has a Pakistan country pack that applies the FBR salary tax slabs (tax years 2025-26 and 2026-27), EOBI at 5% employer and 1% employee of the minimum wage, and provincial social security at 6% (PESSI in Punjab, SESSI in Sindh, KPESSI in Khyber Pakhtunkhwa, BESSI in Balochistan) to every pay run. It checks salaries against the provincial minimum wage, works out gratuity at 30 days' wages per year of service, and builds the FBR section 149 statement, the Annex-C style annual statement, EOBI, PESSI and SESSI schedules and an IBFT or RAAST bank file for you to upload. Rates are a dated starting point you can override, and filing stays with you.
How the province is chosen
Each office address gets a province, and any employee can be given a different one. An employee override wins, then the office, then the company default. The province decides the social security scheme, the minimum wage, the leave rules and the gratuity variant for that person.
Pakistan at a glance
- Tax year
- July to June
- Slab tables loaded
- 2025-26 and 2026-27
- EOBI
- 5% employer + 1% employee of Rs 40,000 (Rs 2,400 a month)
- Provincial social security
- 6% employer
- Minimum wage
- Rs 40,000 a month in every province (Sindh Rs 43,000 from July 2026)
- Gratuity
- 30 days' wages per completed year
- Regions
- Punjab, Sindh, KP, Balochistan, Islamabad
- Direct e-filing
- No. Files to upload to IRIS and the institutions
What the Pakistan pack covers
Tax, contributions and labour rules on every pay run
FBR salary tax slabs
Income tax on salary follows the FBR slab table for the tax year (July to June). The 2025-26 and 2026-27 tables are loaded, the 9% surcharge for 2025-26 incomes above Rs 10 million is applied, and projected annual tax is spread over the pay periods left in the year. Previous employment income and tax already deducted this year can be entered per employee.
Medical allowance exemption
The medical allowance is treated as exempt up to 10% of basic pay. It is on by default and can be switched off for the company.
EOBI
EOBI is worked out at 1% for the employee and 5% for the employer on the minimum-wage base (Rs 40,000 a month from July 2025). It applies automatically once you have five or more active employees, and individual employees can be marked exempt.
Provincial social security
PESSI in Punjab, SESSI in Sindh, KPESSI in Khyber Pakhtunkhwa and BESSI in Balochistan are calculated at the 6% employer rate from each employee's province.
Gratuity and final settlement
The separation wizard works out gratuity at 30 days' wages per year of service (a part year over six months counts), with the Sindh variant, and feeds it into the final settlement.
Working time, leave and minimum wage
Defaults of 9 hours a day and 48 a week, overtime at double rate, 14 days' annual, 10 casual and 8 sick leave (18 annual in Punjab from July 2026), and a check of each salary against the provincial minimum wage. Checks are advisory unless you choose to block.
Statutory IDs on the profile
CNIC with its expiry date, NICOP, NTN, EOBI and social security numbers are stored on each employee profile, format-checked and masked for anyone without permission to see them.
Public holidays
Import Pakistan's 2026 public holidays into your holiday calendar in one step. Dates you already have are skipped.
| Annual taxable salary (Rs) | Tax |
|---|---|
| Up to 600,000 | 0% |
| 600,001 to 1,200,000 | 1% of the amount over 600,000 |
| 1,200,001 to 2,200,000 | Rs 6,000 + 11% of the amount over 1,200,000 |
| 2,200,001 to 3,200,000 | Rs 116,000 + 20% of the amount over 2,200,000 |
| 3,200,001 to 4,100,000 | Rs 316,000 + 25% of the amount over 3,200,000 |
| 4,100,001 to 5,600,000 | Rs 541,000 + 29% of the amount over 4,100,000 |
| 5,600,001 to 7,000,000 | Rs 976,000 + 32% of the amount over 5,600,000 |
| Above 7,000,000 | Rs 1,424,000 + 35% of the amount over 7,000,000 |
As loaded in the app from a professional summary of the Finance Act 2026. Check them against the gazette before relying on them; you can edit any row in Settings.
| Annual taxable salary (Rs) | Tax |
|---|---|
| Up to 600,000 | 0% |
| 600,001 to 1,200,000 | 1% of the amount over 600,000 |
| 1,200,001 to 2,200,000 | Rs 6,000 + 11% of the amount over 1,200,000 |
| 2,200,001 to 3,200,000 | Rs 116,000 + 23% of the amount over 2,200,000 |
| 3,200,001 to 4,100,000 | Rs 346,000 + 30% of the amount over 3,200,000 |
| Above 4,100,000 | Rs 616,000 + 35% of the amount over 4,100,000 |
Loaded in the app with a 9% surcharge on the tax where projected income is above Rs 10 million (section 4AB, marked to verify). Figures as loaded in the app on 3 November 2026. Each rule carries its effective dates and source, and you can override any figure from a date of your choice. Confirm them with your adviser.
| Scheme | Who it applies to | Employee | Employer |
|---|---|---|---|
| EOBI | Companies with 5 or more employees (Auto, or set Yes or No); individuals can be marked not insured | 1% of the minimum wage | 5% of the minimum wage |
| PESSI | Employees whose province is Punjab | None | 6% of wages |
| SESSI | Employees whose province is Sindh | None | 6% of the Sindh minimum wage |
| KPESSI | Employees whose province is Khyber Pakhtunkhwa | None | 6% of wages |
| BESSI | Employees whose province is Balochistan | None | 6% of wages |
| Islamabad | No provincial social security scheme | None | None |
The social security wage ceiling is blank in the pack; set it in Tax and contributions if your institution applies one. Figures as loaded in the app on 3 November 2026. Each rule carries its effective dates and source, and you can override any figure from a date of your choice. Confirm them with your adviser.
| Province or territory | Until June 2025 | From July 2025 | From July 2026 |
|---|---|---|---|
| Punjab | Rs 37,000 | Rs 40,000 | Rs 40,000 |
| Sindh | Rs 37,000 | Rs 40,000 | Rs 43,000 (budget figure, to verify) |
| Khyber Pakhtunkhwa | Rs 36,000 | Rs 40,000 | Rs 40,000 |
| Balochistan | Rs 37,000 | Rs 40,000 | Rs 40,000 |
| Islamabad Capital Territory | Rs 37,000 | Rs 40,000 | Rs 40,700 (to verify) |
Salaries below the minimum wage raise a warning on the salary screen and in the payroll pre-check. The check never blocks a run. Figures as loaded in the app on 3 November 2026. Each rule carries its effective dates and source, and you can override any figure from a date of your choice. Confirm them with your adviser.
Rules by province
Social security, minimum wage and leave change with the province. Each page lists what BusinessHRM applies there.
Where you set it up, and what it produces
Real screens from a demo workspace. Settings live under Settings, Country and compliance and under Payroll settings, Tax and contributions.
Statutory IDs on each employee profile
- CNIC, with its expiry date (required)
- NICOP for overseas Pakistanis
- NTN (National Tax Number)
- EOBI registration number
- PESSI, SESSI, KPESSI or BESSI social security number, by province
- Passport (on the immigration tab)
Stored encrypted, format-checked and masked for anyone without permission to reveal them.
Files BusinessHRM builds for each Pakistan payroll run
- FBR monthly salary withholding statement (section 149), laid out for upload to IRIS
- FBR annual salary statement in the Annex-C style
- EOBI, PESSI and SESSI contribution schedules
- IBFT and RAAST bulk transfer file, with layouts for HBL, Meezan, UBL, MCB and Bank Alfalah to check against your bank's template
- PDF payslips with every tax and contribution line
Files are built from a locked pay run on the Exports page. A contribution register of employee and employer amounts per scheme exports to CSV.
How to switch on the Pakistan pack
- 1Open Settings, then Country and compliance, and choose Pakistan (and the province, state or emirate) for the company or for each office.
- 2In Payroll settings, open Tax and contributions and switch the calculations on. They stay off until you do.
- 3Add each employee's tax inputs and statutory IDs on their profile, and override any rate the pack ships with if your adviser tells you to.
- 4Run payroll in PKR. Every payslip shows the tax and contribution lines, and the export screen builds the bank and statutory files for that run.
Not included for Pakistan
Direct submission to IRIS, EOBI or PESSI portals (you upload the files), per-employee tax certificates, Zakat deduction, provident fund and WWF/WPPF calculation, KPESSI and BESSI export files, and an Urdu interface.
Not legal advice. Rules marked to verify in the app have not yet been checked against the official source.
Other country packs
- AEUnited Arab EmiratesWPS (SIF file), GPSSA, ADPF
- SASaudi ArabiaGOSI, SANED, WPS wages file
- GBUnited KingdomHMRC PAYE, National Insurance, Student loans
- USUnited StatesIRS federal withholding, FICA, FUTA
- AUAustraliaATO PAYG withholding, Superannuation guarantee, STP data
All compliance by country How the compliance engine works Payroll HR software in Pakistan
Pakistan payroll compliance questions
Does BusinessHRM calculate income tax with the FBR slabs?
Yes. With the Pakistan pack switched on, salary income tax uses the FBR slab table for the tax year that applies. The 2025-26 and 2026-27 tables are loaded, and projected annual tax is spread across the remaining months. You can edit any slab if the rates change.
Does it handle EOBI and PESSI or SESSI?
Yes. EOBI is calculated at 1% employee and 5% employer on the minimum-wage base once you have five or more employees, and PESSI, SESSI, KPESSI and BESSI at the 6% employer rate by province. EOBI, PESSI and SESSI schedules can be exported for each run.
Can I file directly to FBR IRIS from BusinessHRM?
No. BusinessHRM builds the monthly section 149 withholding statement and the annual Annex-C style statement for you to upload to IRIS yourself. There is no direct connection to the FBR portal.
Is the app available in Urdu?
Not at the moment. The web app is in English and the Android app is available in English, Arabic, Spanish, Hindi and Chinese.
How is EOBI calculated in BusinessHRM?
At 5% employer and 1% employee of the notified minimum wage, not of actual pay. From July 2025 the base is Rs 40,000, so that is Rs 2,000 from the employer and Rs 400 from the employee each month. Coverage is Auto (on once the company has 5 or more employees, a number you can change), Yes or No, and any employee can be marked as not insured.
Which provincial social security schemes are supported?
PESSI for Punjab, SESSI for Sindh, KPESSI for Khyber Pakhtunkhwa and BESSI for Balochistan, all at 6% employer, worked out from each employee's province. Islamabad has no provincial scheme, so nothing is deducted there. Export schedules exist for EOBI, PESSI and SESSI; KPESSI and BESSI amounts are in the contribution register.
Does BusinessHRM handle provident fund?
Only partly. You can add the optional employee provident fund deduction (8.33% of basic) as a salary component, and the separation form lets you record that a provident fund replaces gratuity. There is no fund ledger, interest or trust accounting.
Is the medical allowance exempt from tax?
Yes, by default. Earnings named as a medical allowance are exempt up to 10% of basic pay, and the company can switch the exemption off in Tax and contributions.
Can I enter salary an employee earned before joining?
Yes. Each employee's tax inputs take the taxable salary and the tax already deducted earlier in the tax year, so the projected annual tax and the remaining monthly deductions come out right.
Run Pakistan payroll with the rules built in
Start free, choose your country and region, switch on tax and contributions, and preview a pay run before anything is paid or filed.
Free forever for unlimited users. No credit card required.