Global PEO and Payroll in Pakistan

Expanding into Pakistan requires careful navigation of federal and provincial labour regulations, payroll rules, and statutory benefits. For companies without a legal entity in the country, managing these requirements directly can be costly and delay market entry.

Acumen International’s Global PEO and Payroll solution enables you to hire and pay employees in Pakistan while remaining fully compliant with local law, without establishing your own legal entity. Our in-country expertise ensures contracts, payroll, and benefits meet all statutory requirements, allowing you to focus on business delivery rather than administrative risk.

PEO vs EOR — The Essentials

The term Professional Employer Organisation (PEO) is widely used in global HR, but in Pakistan the co-employment model it describes is not legally recognised unless the client company already has a registered legal entity in the country. Without such an entity, a foreign company cannot directly employ staff in Pakistan, even if a third party manages payroll and HR.

For companies with a local entity, a PEO can take over HR administration, payroll processing, and compliance support while you remain the legal employer.

For companies without a local entity, the only compliant option is the Employer of Record (EOR) model. In this arrangement, the EOR becomes the legal employer under Pakistani law, handling employment contracts, payroll, tax and social security registration, and compliance, while you direct the employee’s day-to-day work.

When businesses refer to “PEO in Pakistan” but have no entity, they are almost always looking for an EOR service. Acumen International provides both models where legally possible and will recommend the correct structure for your needs.

How the Global PEO and Payroll Model Works in Pakistan

For companies with a registered entity in Pakistan, a PEO can manage HR administration, payroll processing, and compliance tasks while you remain the legal employer.

For companies without a local entity, an Employer of Record (EOR) arrangement is required. The EOR becomes the legal employer in Pakistan, enabling you to hire local or expatriate staff without establishing your own company.

Key functions delivered by Acumen International in Pakistan

• Drafting compliant employment contracts in English and Urdu, aligned with federal and provincial law
• Running monthly payroll in Pakistani rupees with correct tax and social security deductions
• Registering employees with the relevant Employees’ Social Security Institution (ESSI) and the Employees’ Old-Age Benefits Institution (EOBI)
• Administering statutory leave, benefits, and annual profit bonus where applicable
• Managing end-of-service and severance calculations under Pakistani law
• Sponsoring work visas and permits for expatriate hires where eligible

This model allows you to have staff operating in Pakistan within days, without the cost and delay of incorporating a local company, while ensuring every employment arrangement is compliant.

Payroll Compliance in Pakistan — Key Facts for Employers

Tax residency

• Residents are taxed on worldwide income.
• Non-residents are taxed only on Pakistan-source income.

Employer contributions

• ESSI – Provincial social security contributions at fixed rates, subject to wage caps.
• EOBI – Employer contribution equal to 5% of the minimum wage; employee contribution is 1%.

Payroll cycle

• Wages may be paid daily, weekly, fortnightly, or monthly, but the wage period cannot exceed one month.

Profit bonus

• Employers earning a profit in a given year must pay eligible employees (minimum 90 days’ service) a bonus of up to one month’s wages, within three months of year-end.

Non-taxable allowances

• Certain medical reimbursements and allowances are exempt, subject to statutory limits.

Double taxation

• Pakistan has treaties with multiple jurisdictions, allowing foreign tax credits under defined conditions.

Accurate payroll processing in Pakistan requires coordination with both federal and provincial authorities, particularly for social security registration and contributions.

Using the Global Payroll Calculator for Pakistan

Acumen International’s Global Payroll Calculator provides precise, up-to-date cost of hire data for Pakistan before you commit to a new role.

Key outputs for Pakistan

• Full employer cost breakdown, including gross salary, social contributions
• Employee-side deductions for income tax and social security, with net pay projections
• Current tax rates, thresholds, and contribution caps updated in line with legislative changes
• Comparative analysis of employment costs in Pakistan versus other jurisdictions
• Explanatory compliance notes for each cost component

Using the GPC allows you to budget with payroll-run accuracy, ensure offers remain competitive, and avoid unexpected cost overruns.

Why Choose Acumen International for PEO and Payroll in Pakistan

Acumen International enables you to hire, pay, and manage employees in Pakistan with full compliance at both federal and provincial levels. Whether you already have a registered entity or require an EOR arrangement, we deliver a single point of accountability for all employment administration.

Our team integrates employment contracts, payroll processing, statutory benefits, and immigration support into one coordinated employment process. This ensures that your international and local employees are onboarded quickly, paid accurately, and managed in line with local legislation from the first day of employment.

For multi-country operations, we apply the same service standards across all jurisdictions, removing the complexity of working with multiple vendors and ensuring consistent governance.