Pakistan, located in South Asia, is bordered by India to the east, China to the northeast, Afghanistan to the north and west, Iran to the southwest, and the Arabian Sea and the Gulf of Oman to the south. The northern and western highlands of Pakistan contain the towering Karakoram and Pamir mountain ranges, which include some of the World’s highest peaks: K2 (8,611 meters) and Nanga Parbat (8,126 meters). The 1,000 miles long (1,609 kilometers) Indus River and its tributaries flow through the country from the Kashmir region to the Arabian Sea. Pakistan is divided into 113 districts. Agriculture, now no longer the largest sector, contributes roughly one-fifth of GDP, while manufacturing provides about one-sixth. Textiles account for most of Pakistan’s export earnings. Trade and services, which combined constitute the largest component of the economy, have grown considerably.

 

*Please note that the official currency is the currency of remuneration when employed through WorkMotion in Pakistan.

Capital :
Islamabad
Currency :
Pakistani Rupee (PKR, Rs)
Languages spoken :
Urdu and English
Population :
225.2 million (2021 est.)
Minimum wage 2022 :
PKR 20,000 Monthly (Federal)
Cost of Living index :
$ (139 of 139 countries)
Payroll Frequency :
Fortnightly/Monthly
VAT - standard rate :
17%
GDP - real growth rate :
6% (2021 est.)

Statutory Holidays

The national holidays mentioned below are valid for the year 2022.

Date
Holiday Name
Extra Information
February 5
Kashmir Day
March 23
Pakistan Day
April 18
Easter Monday
Only for Christians - Movable - The first Sunday after the Paschal Full Moon (the first full moon that occurs after the vernal equinox)
May 1
Labor Day
May 3-5
Eid-ul-Fitr
Movable - As per the Islamic Lunar Calendar
July 10-12
Eid-ul-Azha
Movable - As per the Islamic Lunar Calendar
August 7-8
Ashura Muharram
Movable - As per the Islamic Lunar Calendar
August 14
Independence Day
October 9
Eid-i-Milad
Movable As per the Islamic Lunar Calendar
December 25
Quaid-i-Azam Day/Christmas
December 26
Day after Christmas
Only for Christians

Contract Sharing Time


The approximate time for sharing the contract with an employee in Pakistan is 4 business days assuming no special requests or changes to our standard employment contract. Any such requests or changes would need to undergo internal and external review, directly leading to a time delay.

NOTE: This number is subject to change and is only an estimation of the Contract Sharing Time. The estimated Contract Sharing Time begins from the moment that WorkMotion has received all required information from both the client and the employee.

What You Need To Know


  • Apart from annual and sick leave, a casual leave of 10 days is also provided to employees.
  • Social security contributions are quite nominal as indicated by PKR 40 paid by the employees towards health insurance every month.
  • A mandatory bonus is paid by every employer who makes profit in a given year, within three months of the closing of the bonus year, to every employee who has been in employment in the bonus year for a continuous period of not less than 90 days.

Labor Conditions


Working Hours

The maximum number of working hours in a week is 48 hours. The daily limit of working hours is nine hours including breaks. No work period can exceed six hours before an interval for the rest of at least one hour is granted, or it should not exceed five hours before an interval for rest of at least half an hour, or for more than eight hours before at least two such intervals have been granted.

 

Overtime

If a worker works for more than nine hours in any day or for more than 48 hours in any week, they are entitled in respect of the overtime worked to be paid at the rate of twice their ordinary rate of pay.

 

Probation Period

A probationer is defined as a workman who is provisionally employed to fill a permanent vacancy in a post and has not completed three months of service therein. No probationer is entitled to any notice if their services are terminated by the employer, nor is any such workman required to give any notice or pay wages in lieu thereof to the employer if they leave employments of their own accord.

Termination Notice Period

 

The termination notice periods are as follows:

Termination CauseNotice Period
Probationary periodNone
Any reason other than misconduct by employer or employee1 month

(May be paid in lieu)

Dismissal due to alleged misconduct1 month from the date of such misconduct to give an opportunity to explain the alleged circumstances.
The failure of plant, a temporary curtailment of production, or any stoppage of work.
  • 50% of daily wages during the first 14 days of lay-off
  • Beyond 14 days, services may be terminated after giving due notice or pay in lieu thereof.

Leave / Time Off

Annual Leave

Every worker who has completed a period of 12 months continuous service in a factory is allowed, during the subsequent period of 12 months, holidays for a period of 14 consecutive days.

If a worker fails in any one such period of 12 months to take the whole of the holidays allowed to them, the remaining period is added to the holidays to be allowed in the succeeding period of 12 months. However, the total number of holidays that may be carried forward to a succeeding period cannot exceed 14.

Sick Leave

Sick leave varies between provinces.

ProvinceSick Leave
Federal16 days with half average pay 
Sindh16 days with full average pay 
Khyber Pakhtunkhwa (North-West Frontier province)16 days with half average pay 
Punjab8 days with full average pay 
Balochistan8 days with full average pay 
Gilgit BaltistanNot specified yet in labor legislation as the province is newly included in Pakistan.
Azad Jammu and Kashmir 8 days with full average pay 

Parental Leave

Maternity Leave

Women employees of public and private establishments under federal law get paid maternity leave of:

BirthNumber of Days
First180 days (six months)
Second120 days (four months)
Third90 days (three months) 

 

Paternity Leave

Male employees of public and private establishments under federal law get paid paternity leave of 30 days.

Other Types of Paid Leave

Casual Leave

Every worker is entitled to casual leave with full pay for 10 days in a year. Such leave is not ordinarily granted for more than three days at a time and is not accumulated. Casual leave is granted upon contingent situations such as sudden illness or any other urgent purpose. It should be obtained on a prior application unless the urgency prevents the making of such an application. 

Unpaid Leave

Under agreements made with the Collective Bargaining Agent, employees who proceed on pilgrimage i.e., Hajj, Umra, Ziarat, are granted special leave up to 60 days. This benefit varies as per the applicable collective bargaining agreement.

Statutory Benefits

Pakistan’s constitution was amended in 2010 to devolve social and labor legislation to the provinces. Some provinces have passed legislation but maintain key features of existing federal programs, and federal legislation is still in effect for provinces that have not yet passed legislation.

BenefitEmployer contributionEmployee Contribution
Old Age, Disability, and Survivors5% of the monthly minimum wage.
  • 1% of the monthly minimum wage
  • None for residents of Sindh province.
Sickness, Maternity and work injury
  • 6% of monthly payroll
  • 7% of monthly payroll up to PKR 5,000 in Balochistan province
PKR 40 (2018) monthly

Health Insurance

Employer contribution is 6% of monthly payroll. In Balochistan, the employer contribution goes up to 7% of monthly payroll up to PKR 5,000.

The employer’s contributions also finance work injury benefits.

Private-sector employees and household workers with monthly earnings up to PKR 18,000 or PKR 22,000 in Punjab province are covered.

Eligibility for benefits does not cease upon leaving covered employment.

Other Insurances

Accident Insurance

 

Employers’ contribution of 6% and employees’ contribution of PKR 40 of monthly roll for sickness, maternity, and work injury benefits fund these benefits.

Private-sector employees and household workers with monthly earnings up to PKR 18,000 or 22,000 in Punjab province are covered. Employees of firms with at least 10 workers are eligible.

Unemployment Insurance

 

The labor code requires employers with at least 20 employees to provide a severance payment of the employee’s last 30 days of wages for each year of employment. Apart from this regulation, there are no unemployment benefits for employees. However, the scope for a regular ‘Unemployment Insurance / Unemployment Benefit’ program that is capable of providing any support to the laid-off/unemployed workers in case of any natural or human-made calamity – including benefits to the health workforce is being analyzed.

Public Pension

Employer contributes 5% of the monthly minimum wage while employees contribute 1% of their monthly salary towards old age, disability, and survivors pension. Employees from Sindh province do not pay any contribution.

Old-age Pension is paid to beneficiaries of age 60 (men) or age 55 (women) with at least 15 years of contributions. Covered employment may continue. 2% of the insured’s average monthly earnings in the last 12 months multiplied by the number of years of contributions is paid.

 

Other Statutory Benefits

Survivor Benefits

The survivor benefits are funded from the old-age pension contributions.

 

Survivor’s Pension

The deceased was in covered employment at the time of death and had at least 36 months of contributions; or received or was entitled to receive an old-age or disability pension. Spouse’s Pension, Orphan’s Pension, Dependent Parent’s Pension are paid.

 

Iddat Grant  

A widow in covered employment may receive a lump sum of up to 130 times her daily earnings on the date of her husband’s death .

 

Death Grant

A lump sum of 30 days of the sickness benefit is paid to an eligible widow(er) or the person who paid for the funeral. The minimum death grant is PKR 1,500.

 

Survivor Grant (employer liability)

A lump sum of PKR 200,000 (PKR 300,000 in Khyber Pakhtunkhwa, PKR 400,000 in Punjab, or PKR 500,000 in Sindh) is paid.

Disclaimer

The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. WorkMotion Software GmbH disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.

Information provided in this Country Guide is provided “as is” without warranty of any kind, either express or implied, including without limitation warranties of merchantability, fitness for a particular purpose, or non-infringement. WorkMotion Software GmbH periodically adds, changes, improves, updates, or removes information without notice, and assumes no liability or responsibility for any errors or omissions in the contents of this Country Guide. This Country Guide may contain links to other websites. WorkMotion Software GmbH disclaims all liability for the privacy practices or the content of such websites.

 

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