Hiring in Pakistan

The terms set out role, salary in PKR, working time, leave, notice and any restrictive covenants. The EOR is the counterparty to the employee, which is what removes the need for your own entity.

English is the standard contract language for commercial roles. Labour law is set by each province, so the rules that apply follow where the employee works.

Fixed-term contracts are permitted, but using them for work of a permanent nature invites challenge and most EORs default to indefinite terms.

Set probation from day one. For workers covered by the standing orders, probation is capped at three months, after which the employee is treated as permanent.

Some EORs shorten probation as policy because they, not you, carry the dismissal risk. Ask before you agree a start date.

Overtime is paid at twice the ordinary rate for covered employees, with daily, weekly and annual hours caps.

Roles in a managerial or supervisory capacity sit outside the overtime rules, so for many professional hires overtime becomes a contractual matter rather than a statutory one. Put the position in writing either way.

Market practice for professional roles often tops up the statutory allowance or merges annual and casual leave into one pool, so confirm how the EOR presents it before you budget. Several public holidays move each year with moon sighting.

Sick leave is 16 days a year on half pay, and many employers pay it in full. Maternity leave is set by province, from 12 weeks in most to 16 weeks in Sindh, and longer under the federal 2023 Act where it applies. Provincial social security can carry part of the cost for covered employees, so confirm which side the EOR carries.

Either side may terminate on notice or pay in lieu. Dismissal still needs a lawful reason, such as misconduct, redundancy or incapacity, and labour courts can order reinstatement for covered workers.

The EOR runs the process as the legal employer and will want the paperwork in order, including final pay, unused leave and gratuity. Some employers run a provident fund in place of gratuity, so check which applies, and keep a written, documented reason.

Group life insurance is compulsory for permanent workers in larger establishments. Private medical cover is standard for professional roles even though it is not mandatory.

EORs often bundle benefits through a group scheme. Ask what is included in the fee and what is billed on top.

Employer contributions are small for professional salaries, because EOBI is 5% of the minimum wage rather than of actual pay and social security stops at a capped base. That is before gratuity accrual and the EOR fee.

The June budget is the trap. Salary tax slabs are reset in the Finance Act each year, so payroll has to be recalculated from 1 July and net pay can move with no change to gross.

Ask whether the EOR sponsors directly or refers to a partner. A partner-model EOR often cannot sponsor at all, and security clearance sits outside the sponsor's control, which can also hold up extensions.

Set start dates after approval, not before.

Get the data processing terms in the service agreement, not just the privacy notice. A personal data protection bill remains in draft, and cross-border transfers still need a lawful basis under any regime your company is subject to, such as UK GDPR.

Ask where payroll data is hosted and who in the partner chain can see it.

Incorporation through the SECP is online, but foreign shareholders and directors need Ministry of Interior security clearance, which commonly takes up to three months. The running cost is the point: statutory audit, tax and withholding filings, provincial labour registrations and foreign exchange reporting set an annual floor.

Permanent establishment risk is about what people do, not where payroll sits. Revenue-generating activity can create exposure regardless of the employment route.