EOBI for employers: registration and monthly contribution

EOBI (Employees' Old-Age Benefits Institution) is how a private-sector worker in Pakistan gets an old-age pension. For an employer it is one line on the salary slip every month, but it is easy to get wrong or forget.

Who has to register

The EOBI law applies to industrial and commercial businesses that employ 5 or more people. Once you are covered, every eligible employee should be registered and you pay every month. If you are not sure whether you are covered, ask EOBI or your accountant; the rules and the online process are on EOBI's own website.

How the contribution is worked out

The contribution is not a share of each person's actual salary. It is worked out on the minimum wage notified by the government:

• Employer: 5% of the minimum wage, for each employee
• Employee: 1% of the minimum wage, cut from their salary

When the minimum wage goes up in the budget, both amounts go up. That is the change most businesses miss: they keep cutting last year's figure for months.

Worked example

If the notified minimum wage were Rs 37,000 a month:

• Employer share: 5% × 37,000 = Rs 1,850 per employee
• Employee share: 1% × 37,000 = Rs 370, cut from salary
• For 12 employees: Rs 22,200 from you and Rs 4,440 from staff, Rs 26,640 a month in all

Use the current notified minimum wage for your province and year, not this example figure.

Keep it right every month

• Put the EOBI number of each employee in their record, next to the CNIC.
• Set the employee share as a fixed deduction, so it is on every slip.
• When the minimum wage changes, update it once, on the date it applies.
• Keep the challans with the month's payroll.

In Munshi's HR and payroll each employee has a field for their EOBI and social security numbers, EOBI is a standard deduction on the slip, and you change the amount once for everyone when the budget changes it. Start free.