What does it cost to hire in Pakistan through an Employer of Record?

UK companies looking at Pakistan usually start with one question: what will this hire actually cost each month, all in? The answer has more parts than the salary figure, but far fewer surprises than hiring in the UK. This guide breaks the cost into its components so you can build an honest budget before you speak to any provider.

The five parts of an EOR cost

Every Employer of Record quote for Pakistan is built from the same blocks. Ask for each one to be shown separately.

1. Gross salary. The figure in the employment contract, paid monthly in Pakistani rupees. You decide it, based on the role and the market.
2. Statutory employer contributions. What the law requires the employer to pay on top of salary, mainly EOBI and, for lower-paid staff, provincial social security.
3. End-of-service and benefits accruals. Gratuity or a provident fund, plus anything you add, such as private medical cover.
4. The EOR service fee. A fixed monthly fee per employee for acting as the legal employer, running payroll and handling compliance.
5. Currency and payment costs. How your GBP invoice is converted to rupees and what that conversion costs.

1. Salary: set by the market, not by statute

Pakistan has a statutory minimum wage, set federally and by each province. For 2026–27 the federal figure is Rs 40,700 a month, and provincial rates sit roughly between Rs 40,000 and Rs 45,000. Professional roles that UK companies typically hire, such as accountants, developers, designers and customer support staff, are paid well above this, so the minimum wage matters mainly because it is the base for some employer contributions.

Agree salaries in rupees rather than pounds. A rupee salary keeps payroll, tax withholding and contributions clean, and you can still budget in GBP using a quoted exchange rate.

2. Statutory employer contributions

This is where Pakistan differs most from the UK. There is no equivalent of employer National Insurance charged on the full salary.

• EOBI (Employees' Old-Age Benefits Institution). The federal pension scheme. The employer pays 5% and the employee 1%, but both are calculated on the minimum wage, not on actual salary. In practice the employer share is a few thousand rupees a month per person, whatever they earn.
• Provincial social security (for example PESSI in Punjab or SESSI in Sindh). Covers medical and injury benefits for lower-paid employees. It applies only to staff earning below the provincial wage ceiling, and the rate and ceiling vary by province, so most professional hires fall outside it.
• Income tax. The employer withholds tax from salary under the salaried tax slabs and pays it to the Federal Board of Revenue each month. This is deducted from the employee's pay, so it is not an extra cost to you, but it affects the take-home figure the employee sees.

For comparison, a UK employer pays employer National Insurance at 15% on earnings above £5,000 a year, plus at least 3% workplace pension contributions. On a professional salary, Pakistan's statutory on-costs are a small fraction of that.

3. Gratuity, provident fund and benefits

Pakistani employment law and practice expect some form of end-of-service benefit. The common approaches are:

• Gratuity: typically 30 days' wages for each completed year of service, paid when employment ends. A careful employer accrues this monthly, which works out at roughly 8.3% of the salary it is calculated on.
• Provident fund: an alternative many employers use instead, with matched employer and employee contributions into a fund.
• Optional benefits: private health insurance, an internet or equipment allowance, and the customary Eid bonus. None of these is a statutory requirement for most roles, but they help you hire and keep good people.

Leave also has a cost in the sense that it is paid time off. Annual, casual and sick leave entitlements are set by provincial law and the contract, and should be written into it from day one.

4. The EOR service fee

The fee is what you pay for the EOR to be the legal employer: issuing a compliant contract, registering the employee, running payroll, filing tax and contributions, and handling HR administration and offboarding. Most providers charge a fixed monthly fee per employee. Some global platforms charge the same fee in every country, which can be expensive relative to Pakistani salaries; a specialist in one country can usually price closer to local costs.

When comparing quotes, check what the fee includes. A low headline fee can exclude onboarding, contract changes, final settlements or payroll corrections.

5. Currency and payment costs

You will usually be invoiced in GBP and the EOR pays salaries in rupees. Ask how the exchange rate is set, whether there is a margin on top of it, and who pays bank charges. A transparent provider shows the salary in rupees, the rate used and its fee as separate lines, so you can see exactly where your money goes.

A simple way to budget

For a quick estimate, take the agreed monthly gross salary in rupees and add:

• the employer EOBI contribution (a small fixed amount)
• around 8–9% for a gratuity accrual, or your provident fund contribution
• the cost of any benefits you choose to offer
• the EOR's monthly fee and any FX margin

Then convert to GBP at a realistic rate and add a buffer for annual salary reviews. Pakistani salaries for in-demand skills move each year, and a budget that assumes none will be tight by year two.

Hidden costs to ask about before you sign

• One-off onboarding or set-up fees per employee
• Deposits held against future payroll or termination costs
• Charges for contract amendments, salary changes or terminations
• Equipment procurement and shipping, if the EOR supplies laptops
• Minimum terms or notice periods on the EOR agreement itself

See how this compares with the alternatives in EOR vs contractors and EOR vs setting up your own company, or read about our Employer of Record service and book a free consultation for a quote broken down line by line.

Frequently asked questions