Pakistan statutory reference
EOBI
Who has to register with the Employees’ Old-Age Benefits Institution, what the contribution is, and the rule that catches employers who shrink.
The Employees' Old-Age Benefits Institution runs the federal pension scheme for private-sector workers. If the Act applies to you, you register, you pay a contribution every month for every secured employee, and you keep paying it whether or not any of them ever claims.
Two things about EOBI catch employers out, and both are in the table below: the contribution is computed on the minimum wage rather than on what you actually pay, and once the Act applies to your establishment, falling back under ten employees does not release you from it.
The contribution
Employer pays
5%
of the minimum wage
Computed on the worker’s minimum wage, not on what the worker is actually paid.
Employee pays
1%
of the minimum wage
Deducted from pay. This is the one statutory deduction here that an employer may take from wages.
Total per secured employee, per month
6%
Five from you, one from them. Both computed on the minimum wage — so a senior engineer and a cleaner on your payroll attract exactly the same EOBI contribution, and a pay rise does not change it. The figure that changes it is the minimum wage.
Read from EOBI's published contribution rates
Whether it applies to you
Ten or more employees brings you in.
The Act applies to every industry or establishment where ten or more people are employed — directly or through anybody else — or were employed on any day in the preceding twelve months.
Read from the Employees’ Old-Age Benefits Act 1976
Dropping below ten does not take you back out.
Section 1(4)(i) continues to apply "even if the number of persons employed therein is, at any time after this Act becomes applicable to it, reduced to less than ten". Shrinking does not end the obligation, and this is the clause employers most often get wrong.
Read from the Employees’ Old-Age Benefits Act 1976
Under ten, you may opt in.
Clause (i-a), inserted in 2001, lets a smaller establishment apply voluntarily. Cover starts from the date the application is submitted.
Read from the Employees’ Old-Age Benefits Act 1976
Why the published guides say five employees
Several widely-read commercial guides give the EOBI threshold as five employees. The Act as published by EOBI itself says ten, at section 1(4)(i), and has since the 1983 amendment that introduced the sub-section. We have linked the text above so you can read the clause rather than take our word for it.
The confusion is worth understanding, because the thresholds genuinely differ between schemes: EOBI is federal and the provincial social security institutions each set their own. A guide that collapses them into one number will be wrong about at least one.
What this means month to month
- Count everybody employed directly or through anybody else — contractors placed through an agency are counted by the Act's own wording.
- The count looks back twelve months. Ten people for one day last winter brings you in.
- Once in, you stay in. Plan the obligation as permanent, not as something that lapses when you shrink.
- Under ten and want the cover for your staff? Clause (i-a) lets you apply, and it starts from the date you apply — not retrospectively.
Found something out of date?
These figures change by notification, often without announcement. If you hold a notification we have not seen — especially a provincial one — send it and we will correct the page and credit the source.