EOBI — the Employees' Old-Age Benefits Institution — is Pakistan's mandatory pension and social insurance scheme. Every employer with five or more employees is legally required to register with EOBI, deduct employee contributions from salary, and add their own employer contribution. Non-compliance can result in criminal prosecution under the EOBI Act 1976. Yet many Pakistani businesses still manage EOBI contributions manually, leading to errors, late payments, and audit exposure. This guide covers everything you need to know.
What Is EOBI and Who Must Register?
EOBI was established under the Employees' Old-Age Benefits Act 1976 to provide pension, invalidity, and survivor benefits to formal-sector workers in Pakistan. Any company, partnership, or individual employer with five or more employees must register with EOBI within three months of reaching that threshold. This applies to industrial, commercial, and service-sector employers. Agricultural employers and domestic servants are generally excluded, though coverage has been expanding.
- ✓Threshold: 5 or more employees triggers mandatory registration
- ✓Covers all Pakistani employees regardless of salary level
- ✓Employer must register the business and enroll each employee individually
- ✓EOBI insured number is issued to each enrolled employee
- ✓Contributions must be paid monthly — no quarterly or annual deferral allowed
EOBI Contribution Rates and the PKR 40,000 Minimum Wage Basis
Monthly Contribution Calculation Example
EOBI contributions are calculated as a percentage of the minimum wage, not the employee's actual salary. This is one of the most misunderstood aspects of EOBI. Regardless of whether an employee earns PKR 60,000 or PKR 500,000 per month, contributions are computed on the notified minimum wage of PKR 40,000 per month (as per the current federal minimum wage notification). The contribution rates are: employer pays 5% and employee pays 1%.
- ✓Minimum wage basis: PKR 40,000
- ✓Employee contribution (1%): PKR 40,000 × 1% = PKR 400 per month
- ✓Employer contribution (5%): PKR 40,000 × 5% = PKR 2,000 per month
- ✓Total monthly EOBI contribution per employee: PKR 2,400
- ✓For a company with 50 employees: PKR 2,400 × 50 = PKR 120,000/month
- ✓Annual EOBI outflow for 50 employees: PKR 1,440,000
How to Register with EOBI
EOBI registration is a two-step process: registering the employer and registering each employee. Employer registration is done through the EOBI online portal (eobi.gov.pk) or at the nearest EOBI regional office. You will need your NTN (National Tax Number), CNIC of the proprietor or directors, business registration certificate, and a list of employees with their CNICs. Once the employer account is created, you receive an Employer Registration Number (ERN). Employee registration requires each worker's CNIC, date of birth, and joining date. EOBI issues each employee a unique insured number that stays with them throughout their career.
- ✓Visit eobi.gov.pk and create an employer account
- ✓Submit NTN, business registration, and director CNICs
- ✓Receive Employer Registration Number (ERN)
- ✓Register each employee with their CNIC and joining date
- ✓Monthly contributions are paid via bank challan or online payment
- ✓File monthly contribution statement through the EOBI portal
Penalties for Non-Compliance
The EOBI Act 1976 has strong enforcement provisions that many employers underestimate. Failure to register, under-reporting employees, or late payment of contributions can result in significant penalties. EOBI inspectors conduct routine audits of employers, and EOBI can attach employer bank accounts and property to recover dues.
- ✓Late payment: 1% surcharge per month on outstanding contributions
- ✓Failure to register: Fine of up to PKR 50,000 and/or imprisonment
- ✓Misrepresentation of employee numbers: Criminal prosecution under Section 26
- ✓Persistent default: EOBI can attach bank accounts and business assets
- ✓Directors and owners can be held personally liable for EOBI dues
EOBI at Year-End: Annual Returns and Employee Records
At the close of each financial year, employers are required to submit an annual EOBI return summarizing total contributions paid for each employee. This creates a permanent pension contribution record for the employee. When an employee retires at age 60 (men) or 55 (women) after completing 15 years of insured employment, they become eligible for a monthly EOBI pension. The pension amount is calculated based on the number of contribution years and the notified pension rates. As of 2025, the minimum EOBI pension is PKR 10,000 per month — though there is ongoing lobbying to increase this given inflation.
How Peoplifi Automates EOBI
Managing EOBI manually across dozens or hundreds of employees is a recipe for errors. Peoplifi automatically calculates employee and employer EOBI contributions each payroll run based on the current minimum wage basis. The employee contribution is deducted from net salary, the employer contribution is accrued as a payroll liability, and both figures appear on the payslip for full transparency. At month-end, Peoplifi generates the EOBI contribution statement in the format required by EOBI's portal, making the filing process a matter of minutes rather than hours. New employees are flagged for EOBI enrollment, and the system tracks each employee's insured number, enrollment date, and contribution history — giving you a complete audit trail at the click of a button.
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