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Undoubtedly, payroll is a critical process for any organization. The pay cycle in Pakistan refers to the period for which an organization pays its employees, which can vary depending on the pay frequency the organization chooses to adopt.

In Pakistan, the payroll frequency can be daily, weekly, bi-monthly, or monthly. The employee must pay salaries at least once a month.

There is no legal requirement for employers to pay a 13th-month payment.

Effective July 1, 2023, there is a revision in the minimum wages in Sindh

Categories of Skilled Workers

Minimum Rate of Wages

Skilled Workers employed in industrial and commercial establishments.

Per Day (8 hours of Work) - Rs 1280/-

Per Month (26 Working Days) - Rs 33280/-

Under the Shops and Establishments Ordinance, an employee who works more than 9 hours per day and 48 hours per week is said to perform overtime work. An employee shall not perform more than 624 hours of work in a year in overtime. Employees who work overtime are compensated at double the rate of ordinary wages. Factories Act, 1934 § 47 – 47A.

Under the Factories Act, an employee who works in a non-seasonal factory for more than 9 hours per day and 48 per week and in a seasonal factory for more than 9 hours per day and 50 hours per week is said to perform overtime work.

Such overtime work is compensated twice an employee's ordinary rate of wages. Shops and Commercial Establishments Act, 1969 § 9.

Employers must maintain all Forms IT-3 for five years. Employers must preserve a record of all employee's occupations, wages, attendance, dates of entry and exit, and registration numbers, in addition to copies of returns for two years under the EOBI and ESSI schemes. Pakistan's national government does not assess any other taxes on employment income.

The Constitution of Pakistan 1973 clearly envisages equality before the law as a fundamental right of every Pakistani citizen and provides protection from discrimination on the basis of sex as a fundamental right. Broadly, discrimination is prohibited on the grounds of gender, religion, political affiliation, sect, skin color, caste, creed, ethnic background, or age.

Under federal and provincial laws, the requirement for a written employment contract is provided only for workers. Although these laws do not prescribe the terms that must specifically be covered in the employment contract, in practice, the following terms are commonly included:

• wages or remuneration payable;
• the date of commencement of the employment;
• the term (i.e., the period or duration) of employment;
• the nature of the work, including the scope of duties;
• types of leave (including annual leave, casual leave, sick leave, or others);
• the duration of the probationary period;
• other benefits (monetary and non-monetary);
• the procedure for termination;
• any restrictive covenants; and
• applicable dispute resolution mechanisms.

In Pakistan, the following documents are required

• Personal Information
• Copy of Id with residential proof
• CV
• Bank details
• Educational Qualification
• Copy of passport (for expats)
• Employment contract on stamp paper (for expats)

In Pakistan, probation periods are outlined in the employees’ employment contracts. The probation period is typically three months long.

Pakistan has 11 paid public holidays.

The Ministry of Interior and Narcotics Control mandates the following paid public holidays:

• 5 Feb Kashmir Day
• 23 Mar Pakistan Day
• 22 Apr Eid-ul-Fitr (Tentative Date)
• 23 Apr Eid-ul-Fitr Holiday (Tentative Date)
• 24 Apr Eid-ul-Fitr Holiday (Tentative Date)
• 25 Apr Eid-ul-Fitr Holiday (Tentative Date)
• 1 May Labour Day
• 29 Jun Eid al-Adha (Tentative Date)
• 30 Jun Eid al-Adha Holiday (Tentative Date)
• 1 Jul Eid al-Adha Holiday (Tentative Date)
• 27 Jul Ashura (Tentative Date)
• 28 Jul Ashura Holiday (Tentative Date)
• 14 Aug Independence Day
• 27 Sep Eid Milad un-Nabi (Tentative Date)
• 9 Nov Iqbal Day
• 25 Dec Christmas Day
• 25 Dec Quaid-e-Azam Day

Note: Holidays without a date are based on the Islamic calendar; their dates on the Gregorian calendar change yearly.

Employers generally must provide employees with 14 days of paid annual leave.

The ESSI of every province generally pays 75% of wages for up to 121 days a year or 365 days at 100% of wages for tuberculosis or cancer patients. Those injured are entitled to 100% of wages for up to 180 days a year.

A female employee is entitled to paid maternity leave for 180 days for the birth of the first child, 120 days for the second child, and 90 days for the third child from the commencement date of leave. Unpaid leave can be granted for additional children depending upon the agreement between the employee and employer. Maternity and Paternity Benefits Act, 2020 § 3.

Effective May 18, 2023 law introduces provisions for maternal and paternal leaves, allowing mothers to take up to six months of leave for their first child and three or four months for subsequent children.

The legislation also includes provisions for paternity leave, granting fathers the opportunity to take three one-month leaves during childbirth. This is the first time that paternal leave has been legally protected.

1. The law will apply to both private and public sectors within the limits of Islamabad.
2. Violation of the Bill will lead to six months in jail or a fine of Rs. 100,000 or both.

A male employee is entitled to 30 days of paid leave for the birth of his child from the date of commencement of leave. The leave is available for fathers a maximum of 3 times during the entire service. Unpaid leave can be granted for additional children depending upon the agreement between the employee and employer. In another way, granting fathers the opportunity to take three one-month leaves during the childbirth process. This is the first time that paternal leave has been legally protected.

Effective May 18, 2023 law introduces provisions for both maternal and paternal leaves, allowing mothers to take up to six months of leave for their first child, and three or four months for subsequent children.

The legislation also includes provisions for paternity leave, granting fathers the opportunity to take three one-month leaves during the childbirth process. This is the first time that paternal leave has been legally protected.

1. The law will be applicable to both private and public sectors within the limits of Islamabad.
2. Violation of the Bill will lead to six months in jail or a fine of Rs100, 000 or both.

Under the Shops and Establishments Ordinance, an employee is entitled to 10 days of paid casual leave in a calendar year. This leave shall not be granted for more than 3 days at a time and cannot be accumulated.

Employment of a permanent worker cannot be terminated for any reason other than misconduct unless one month’s notice or wages have been given by the employer or by the employee. One month’s wages are calculated on the basis of the average wage earned during the last three months of service. If the employee has been with the company for less than one month, s/he must be paid one-month wages in lieu of notice.

Employers may terminate an employment contract but will be required to provide a written termination letter explicitly stating the reasons for termination. It should be noted that the local law does not state the reasons for which an employment relationship may be terminated. However, case law includes serious illness, inefficiency in performing the job, and the financial needs of the company. Misconduct, provided that the employee is given an opportunity to respond to the charges, is sufficient enough for dismissal. Instances of serious misconduct include willful disobedience, damage to the employer’s property, theft, fraud, habitual breach of the law, absence without permission, and illegal strikes.

Employees are entitled to severance pay when terminated for any reason other than misconduct. The severance pay is equivalent to 30 days’ wages for every completed year of service or any portion in excess of six months (for example, five years and eight months is considered six years of service).

Foreign workers intending to work in Pakistan generally must obtain a work visa at the Pakistani consulate in their country of citizenship. Work visas are granted for one year upon approval by the Board of Investment and are renewable yearly.

You can apply for two types of visas online.

• First Time (New): You can apply for a new visa if you do not possess a valid Pakistan visa.
• Extension: You can apply for a visa extension if you possess a valid Pakistan visa and reside in Pakistan.

Citizens of foreign countries who have a valid job offer and meet the requirements are eligible to apply for this visa.

1. Passport
2. Photograph
3. SECP registration letter of company
4. Recommendation letter By BOI (In case of Extension Mandatory)
5. Contact Details of the Sponsor
6. Undertaking on company letterhead/In case of CPEC/Government approved project, letter from concerned department /ministry
7. CV of applicant
8. Covering letter on company’s letter head
9. Company profile
10. Employment agreement
11. FBR NTN certificate of the company

1. An Entry Work Visa can be granted for up to 3 Months (Single Entry).
2. An Extension Work Visa can be granted up to 2 Years (Multiple Entries).

Employee Background Checks are conducted in Pakistan.

Types of background checks:

1. Criminal Record
2. Health checks/medical screening
3. Education and past employment records
4. Drug and alcohol testing
5. Credit Checks

The law prescribes no express prohibitions against background checks of an applicant, whether conducted by the employer or a third party.