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Pakistan

Basic Economic Summary

Overview

Pakistan is one of the developing countries in the world, ranking 46th in terms of nominal GDP. They have managed to minimize their poverty score by 80% in a matter of a decade and have since provided opportunities for their people’s career growth. Trade and services occupy the largest component of their economy while agriculture comes at second. 

Basic Information

  • Local Languages: Urdu (Official), English (Official)
  • Major Economic Hubs: Islamabad, Karachi, Lahore, Faisalabad
  • Currency: Pakistani Rupee (PKR)
  • Population: 216.47 million (2022)
  • Date Format: dd/mm/yyyy

Useful Information

  • GDP Per Capita (in USD): 1,250.00 (2022)
  • Exchange Rate (PKR/USD): 0.0056

Local Universities

Renowned Local Universities:

University Number of Graduates (Undergrad)
Abdul Wali Khan University Mardan Information Unavailable
Quaid-i-Azam University Information Unavailable
COMSATS University Islamabad 1,407 (2019)
Government College University Faisalabad Information Unavailable

Salary Data

Web designing and developing, Graphic designing, IT engineering, computer system analysts, content writing, computer support specialists, app developing and designing and SEO jobs are growing in demand in Pakistan.

Job Title Average Monthly Salary (PKR) Average Monthly Salary (USD)
Customer Service Representative 28,700 160.84
Software Engineer 73,500 411.91
Software Developer 75,000 420.32
Data Scientist 126,000 706.13
UX Designer 57,100 320
Product Manager 109,000 610.86
Sales Representative 49,400 276.85

More information about average salaries in Pakistan can be found on Salary Explorer.

Talent Sourcing Tips

English Proficiency: Low Proficiency

Number of LinkedIn Users (2021): 7,176,000

Top Local Job Portals: BrightSpyre, Bayrozgar, Mustakbil

More information about job portals in Pakistan can be found here.

Top Recruitment Agencies: Alahad Group, Ghaffar and Sons, BinFaisal

Taxes

Employer Payroll Tax

Type of Tax Contribution (%)
Social security contribution 6%(7% of monthly payroll up to 5000 rupees in Balochistan province)
Pension 5% (of minimum wage)**

** The minimum wage in 2020 is PKR17,500 per month .

Employee Payroll Tax

Type of Tax Contribution 
Health insurance 40 rupee flat-rate each month
Pension 1% (of minimum wage)

Employee Monthly Income Tax

Income from Salary Exceeds 75% of Taxable Income

Income Group (PKR) Tax on Income (PKR) Tax on Excess
0 – 50,000 0 0%
50,000 – 100,000 0 5%
100,000- 150,000 30,000 10%
150,000 – 208,333.33 90,000 15%
208,333.33 – 291,666.67 195,000 17.5%
291,666.67 – 416,666.67 370,000 20%
416,666.67 – 666,666.67 670,000 22.5%
666,666.67 – 1,000,000 1,345,000 25%
1,000,000 – 2,500,000 2,345,000 27.5%
2,500,000 – 4,166,666.67 7,295,000 30%
4,166,666.67 – 6,250,000.00 13,295,000 32.5%
≥ 6,250,000.00 21,420,000 35%

Employee Monthly Income Tax

Other cases

Income Group (PKR) Tax on Income (PKR) Tax on Excess
0 – 33,333 0 0%
33,333.33 – 50,000 0 5%
50,000 – 100,000 10,000 10%
100,000 – 200,000 70,000 15%
200,000 – 250,000 250,000 20%
250,000 – 3,333.33 370,000 25%
3,333.33- 500,000 620,000 30%
≥ 500,000 1,220,000 35%

Pakistan follows a progressive income tax model. Links to the employee payroll tax (social security contribution and pension) and employee income tax.

Minimum Wage & Payroll

Minimum Wage

The minimum wage is 17,500 PKR per month.

Payroll Cycle

Wages can be paid on a daily, weekly, bimonthly, or monthly basis.

Wage period cannot exceed one month.

Working Hours & Statutory Leave

Maximum working hours

Employees can only work a maximum of 9 hours a day and a maximum of 48 hours a week.

Overtime pay

Employees are paid 200% of their regular pay on normal days.

Employees are paid 300% of their regular pay during holidays.

Public Holidays

The public holidays can be found here.

Annual Leave

Employees are given 14 days of annual leave after completing 12 months of service.

It cannot be divided separately.

Employees are paid their normal wages during leave.

Factory workers receive half of their pay due before the beginning of the leave.

Sick Leave

Employees are given 121 days of sick leave per year.

During their sick leave, employees are paid 75% of their salary.

If employees are ill with tuberculosis or cancer, they are given a maximum leave of 365 days and they receive their full wages.

To receive these benefits, the employee must have at least 90 days of contributions in the six months before sickness or injury.

Parental Leave

Maternity Leave

Employees are entitled to 3 months of paid maternity leave.

No employer is permitted to terminate the female employee while she is on maternity leave.

Paternity Leave

Employees have one-month leave for each of their first three children.

Offboarding & Termination

Termination Process

A written letter should be provided when terminating a contract and reasoning for the termination must be sufficient.

Notice Period

Both employee and employer should provide a month’s time notice.

If sufficient notice is not provided, a monthly salary in lieu shall be provided.

Severance Pay

Severance pay amounts to 30 days’ wages for each completed year of service.

Probation period

Employees in Pakistan are usually given 3 months probation period

Employee Benefits

Insurance

There are two general social security schemes in Pakistan that provide coverage for their employees. The first one, The Provincial Employees Social Security (PSSS), gives benefit coverage for employees in cases of sickness, maternity, employment, injury or death. The second one, The  Employees Old Age Benefit (EOBI) provides four types of benefits to insured employees or their survivors: Old-Age Pension (or Reduced Pension), Survivors’ Pension, Invalidity Pension and Old-Age Grant (if an employee is not eligible for pension).

Employee Share Option Plan

Pakistan offers Employee stock options for their employees as a way to retain talent and motivate workers. Just recently, they have allowed not only publicly listed companies but also start-up companies to offer ownership rights to their employees as compensation. For more information regarding their recent announcement and their regulations surrounding this benefit, you may refer to the following links: Press Release; SECP website

VAT

The standard VAT rate in Pakistan is 17%.

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