HR Software for Pakistan
Leave Policy
Maternity Leave
Pregnant employees are entitled to 180 days of paid maternity leave for the first child, 120 days for the second child and 90 days for more than three children. The employee receives 100% of her salary during this period and the employer is responsible for this compensation.
You can use the leave module in IceHrm to manage maternity leave in Pakistan.
Paternity Leave
Employees are entitled to 30 days of paid leave upon the birth of a child. This is paid by the employer at 100% of the regular salary.
Parental Leave
There is no parental leave law in Pakistan. However, employees may be entitled to maternity and paternity leave.
Sick Leave
Sick leave in Pakistan is not defined by local labor law, however employees can use their paid vacation days to take sick leave. This vacation is paid in the same way as regular vacation. If an employee does not have accrued vacation days, he or she may take one unpaid day for sick leave.
Pay & Tax
Minimum Wage Requirements
The minimum wage is PKR 25,000 per month.
Individual Income Tax
Personal income tax ranges from 0% to 35%. Income tax is calculated at progressive rates. Several additional factors can affect overall rates, such as: the household status and the number of children.
| Gross Annual Income | Tax Rate (%) |
|---|---|
| Up to PKR – 600,000 | 0% |
| Up to PKR – 1,200,000 | 5% |
| Up to PKR – 1,800,000 | 10% |
| Up to PKR – 2,500,000 | 15% |
| Up to PKR – 3,500,000 | 17.5% |
| Up to PKR – 5,000,000 | 20% |
| Up to PKR – 8,000,000 | 22.5% |
| Up to PKR – 12,000,000 | 25% |
| Up to PKR – 30,000,000 | 27.5% |
| Up to PKR – 50,000,000 | 30% |
| Up to PKR – 75,000,000 | 32.5% |
| Over PKR – 75,000,000 | 35% |
Payroll Cost
The cost to the employer is generally estimated at 16.7-22.7% + fees of the employee’s salary.
- Sindh Employees’ Social Security Institution (SESSI) – 6.00%, only for salaries below PKR 30,000
- Contribution to Gratuity Fund – 8.33%
- Life Insurance – PKR 608
- EOBI (Employee Pension Plan) – PKR 1,250
- Holiday bonus/13. Salary: 8.33%
Please note: Caps apply to some contributions, so percentages may vary.
Overtime Pay & Maximum Hours
Pay for overtime is mandatory and can be offset against salary. Hours worked outside of normal working hours are considered overtime. Employees can work a maximum of 3 hours of overtime. Employees are paid for additional hours:
- 200% of the hourly rate for the first three hours.
- 300% of the hourly rate for public holidays
The standard working hours are eight hours per day and 40 hours per week. The normal working week lasts from Monday to Friday.
Termination
Termination Requirements
Dismissals must take into account complex rules and the regulations of the country in which an employee is employed. Off-boarding is always carried out by the employer with the main participants. It may include ad hoc fees as well as required or recommended steps in certain termination cases.
Terminations in Pakistan can be complex. In Pakistan, employers cannot terminate at will outside of the probationary period and the termination must be for a valid reason.
Permissible terminations include:
- Voluntary by the employee
- By mutual agreement
- Unilaterally by the employer due to:
1. Probation period
2. Objective reasons
3. Dismissal for disciplinary reasons
4. Performance due to unsuitability for the position - When the contract expires
Notice Period
The notice period is at least 30 days.
Severance for Employees
In Pakistan, all employees who are terminated are entitled to severance pay unless there is misconduct. The severance payment is 30 days per year of service up to six months’ salary.
To protect you from unforeseen financial risks arising from dismissals, IceHrm applies a severance pay provision in all employment contracts in this country. IceHrm has extensive expertise in managing litigation risk around the world and our severance provision calculation is based on prevailing common law or statutory requirements and best local practices. If your employee resigns or is not entitled to severance pay, you will receive a refund of any unused amounts.
Statutory Time Off
Paid Time Off
Both full-time and part-time employees are entitled to 14 days of paid vacation per year. PTO is credited monthly at 1.66 days per month. Employees are entitled to annual leave after 12 months of work.
Public Holidays
Pakistan observes 16 national and 22 regional holidays, depending on the employee’s place of residence.
National holidays include:
Kashmir Day
- Pakistan Day
- Eid ul-Fitr (3 days)
- Labor Day
- Eid ul-Azha (3 days)
- Ashura (2 days)
- Independence Day
- Milad un-Nabi
- Allama Iqbal Day
- Quiad-e-Azam Day/Christmas
- Day after Christmas (for Christians only)
Onboarding
Onboarding
Onboarding takes one working day
Additional Info
Employment Contract Details
The contracts must be written in English. They must be in writing and signed by both parties.
A contract must contain:
- Surname
- Start date
- Length of employment
- Job descrption
- Conditions for Termination
Probation Period
A probationary period is not required. The minimum probation period is three months and can be up to one year.