Pakistan Social Contributions Guide 2026

EOBI — Employees Old-Age Benefits Institution

The Employees Old-Age Benefits Institution (EOBI) administers Pakistan's old-age pension scheme for private sector employees. Contributions are mandatory for all employers and employees registered under the EOBI Act 1976. The contribution structure is: Employee: 1% of minimum wage and Employer: 1% of minimum wage, for a total of 2% of minimum wage. The contribution is calculated on the minimum wage (not actual salary), which for 2026 is approximately PKR 37,000 per month, making the monthly contribution roughly PKR 370 per side. EOBI covers approximately 7.5 million registered workers and provides old-age pensions, invalidity pensions, and survivor pensions.

Workers Welfare Fund (WWF)

The Workers Welfare Fund (WWF) is a contribution paid by employers at 2% of net profit. It applies to companies with a certain number of employees and a minimum profit threshold (varies by year). The fund finances housing, educational, and health facilities for workers. Contributions are paid annually and are administered by the Workers Welfare Board at the provincial level. Non-compliance can result in attachment of assets and recovery as arrears of land revenue.

Workers' Profit Participation Fund (WPPF)

The Workers' Profit Participation Fund (WPPF) requires certain companies to distribute 5% of their annual net profit to workers. This applies to industrial and commercial establishments with 10 or more employees. The fund is administered by a board of trustees and amounts are distributed among eligible workers in proportion to their earnings. The WPPF is distinct from WWF — WWF is a government levy, while WPPF is a direct worker entitlement. Non-compliance can lead to prosecution and penalty equal to the unpaid amount.

Provincial Health Insurance — Sehat Sahulat

Pakistan does not have a national health tax or mandatory health insurance contribution like many countries. Instead, the government provides health coverage through the Sehat Sahulat Program (Prime Minister's National Health Insurance Program). For formal sector employees, provincial governments fund health coverage through various schemes. Key features: in-patient coverage up to PKR 1 million per family per year, cashless treatment at empaneled hospitals, and coverage for pre-existing conditions from day one. The program is primarily tax-funded rather than contributory. Khyber Pakhtunkhwa and Punjab have their own expanded versions (Sehat Card Plus).

No National Health Tax

Unlike countries that levy a specific health contribution or health tax as a percentage of salary, Pakistan does not have a dedicated national health tax. The health system is funded through general tax revenue, including the federal budget allocation to health, which was approximately 1.2% of GDP in recent years. The Sehat Sahulat Program is financed through federal and provincial budgets rather than a ring-fenced health contribution.

FAQs

Who must register for EOBI?

All employers with 5 or more employees must register with EOBI. Registration is done through the EOBI regional office or online portal. Employers must deduct employee contributions and remit both shares monthly. Penalties apply for late or non-payment.

Is WWF applicable to all companies?

WWF applies to companies with a minimum number of employees and a profit threshold. Small businesses and startups below the threshold are exempt. The exact criteria can change annually through the Finance Act.

Can employees opt out of EOBI?

No, EOBI contributions are mandatory for covered employees. There is no opt-out provision. The pension benefit is earned upon meeting vesting conditions (minimum 15 years of insurable employment for full pension).

Disclaimer

This guide provides general information about Pakistan social contributions for 2026. Rates, thresholds, and rules are subject to change through annual legislation. Always consult with a qualified professional in Pakistan for advice specific to your situation. InvestmentKit does not provide legal or tax advice.