What is EOBI and Its Legal Basis
The Employees Old-Age Benefits Institution (EOBI) is a statutory body established under the Employees Old-Age Benefits Act, 1976. It operates under the Federal Government and provides old-age pension, invalidity pension, survivors pension, and old-age grants to insured workers across Pakistan.
EOBI is mandatory for all industrial and commercial establishments that fall within its scope. The Act covers factories, commercial establishments, and other organizations as defined, making compliance a legal obligation rather than a voluntary benefit.
Who Must Register with EOBI
Every employer who has five or more employees is required to register with EOBI. This threshold applies across all sectors including manufacturing, services, retail, and technology. There is no exemption based on business size or revenue, only the employee count matters.
Once registered, the employer must also register each employee as an insured person. Both registration obligations must be fulfilled within the timeframes specified by EOBI to avoid penalties.
Current EOBI Contribution Rates for 2025
Contributions are calculated on the minimum wage, not on the employee's actual salary. As of 2025, the federal minimum wage is PKR 37,000 per month. This means even if an employee earns PKR 150,000, the EOBI contribution is still based on PKR 37,000.
- Employer share: 5% of minimum wage = PKR 1,850 per employee per month
- Employee share: 1% of minimum wage = PKR 370 per employee per month
- Total monthly contribution: PKR 2,220 per employee per month
The employer is responsible for deducting the employee share from wages and depositing the combined contribution to EOBI by the due date.
Step-by-Step EOBI Contribution Calculation
Example 1: Company with 50 Employees
A manufacturing firm with 50 employees calculates its EOBI obligation as follows:
- Employer share: 50 x PKR 1,850 = PKR 92,500
- Employee share: 50 x PKR 370 = PKR 18,500
- Total monthly deposit: PKR 111,000
Example 2: Company with 200 Employees
A large service company with 200 employees:
- Employer share: 200 x PKR 1,850 = PKR 370,000
- Employee share: 200 x PKR 370 = PKR 74,000
- Total monthly deposit: PKR 444,000
Example 3: Mixed Salary Band Company (100 Employees)
Regardless of actual salary, EOBI is always based on the minimum wage. A company with 30 employees earning PKR 40,000, 40 employees earning PKR 80,000, and 30 employees earning PKR 150,000 pays the same per-employee EOBI rate for all 100 staff:
- Employer share: 100 x PKR 1,850 = PKR 185,000
- Employee share: 100 x PKR 370 = PKR 37,000
- Total monthly deposit: PKR 222,000
EOBI Contribution Quick Reference Table
| Employee Count | Minimum Wage (PKR) | Employer Share/Month (PKR) | Employee Share/Month (PKR) | Total Monthly (PKR) |
|---|---|---|---|---|
| 10 | 37,000 | 18,500 | 3,700 | 22,200 |
| 50 | 37,000 | 92,500 | 18,500 | 111,000 |
| 100 | 37,000 | 185,000 | 37,000 | 222,000 |
| 200 | 37,000 | 370,000 | 74,000 | 444,000 |
| 500 | 37,000 | 925,000 | 185,000 | 1,110,000 |
EOBI Registration Process
Employers can register through the EOBI online portal at eobi.gov.pk. The process involves the following steps:
- Visit the EOBI employer registration portal and create an account
- Provide business registration details (NTN, SECP/CNIC information)
- Submit the list of all employees with their CNIC numbers and date of joining
- Receive your EOBI Employer Registration Number
- Register each employee individually to obtain their EOBI Insured Person numbers
Documents typically required: NTN certificate, business registration certificate, CNIC copies of all employees, bank account details for refund purposes.
Monthly Deposit Deadlines
EOBI contributions must be deposited by the 15th of the following month. For example, contributions for January must be paid by February 15. Payments are made through designated banks or via the EOBI online payment system.
Employers must also submit a monthly statement alongside the payment, listing each employee and their contribution for that month.
Penalties for Non-Compliance
Failure to register, late deposits, or under-reporting of employees carries serious financial consequences:
- Late payment surcharge: 3% per month on arrears for delayed deposits
- Non-registration penalty: Fines as specified under the EOBI Act, plus back contributions for the entire period of non-compliance
- Audit and prosecution: EOBI has the power to audit employer records and initiate legal proceedings for persistent non-compliance
These penalties compound quickly. A company that delays payments for six months on a PKR 222,000 monthly liability would owe over PKR 40,000 in surcharges alone, on top of the arrears.
Common Employer Mistakes
- Calculating contributions on actual salary: EOBI is based on minimum wage, not gross or basic salary
- Not registering new hires promptly: Every new employee must be registered within 30 days of joining
- Missing the 15th deadline: Many payroll teams process EOBI with the general vendor payment cycle, causing frequent late filings
- Confusing EOBI with PESSI/SESSI: These are separate obligations. EOBI is federal, social security is provincial
- Not maintaining employee EOBI cards: Employees are entitled to their insured person number for claiming benefits
How Peoplifi Automates EOBI Calculation and Submission
Managing EOBI manually across even 20 employees introduces significant risk. Peoplifi's payroll platform automates every aspect of EOBI compliance:
- Automatically calculates employer and employee EOBI shares on every payroll run
- Tracks minimum wage updates and adjusts contribution amounts accordingly
- Generates the monthly EOBI statement ready for submission
- Sends deadline reminders before the 15th of each month
- Maintains a complete audit trail of all contributions per employee
You can also use the Peoplifi EOBI Calculator to get a quick estimate of your monthly EOBI liability based on your workforce size.
Frequently Asked Questions
Is EOBI mandatory for all employers in Pakistan?
EOBI is mandatory for all employers with five or more employees in industrial and commercial establishments. Agriculture, domestic workers, and certain government entities may be exempt, but most private sector businesses are covered.
What if an employee earns more than the minimum wage?
EOBI contributions are always calculated on the notified minimum wage, currently PKR 37,000. An employee earning PKR 200,000 still only contributes PKR 370 per month, and the employer only contributes PKR 1,850 for that employee.
What benefits does an insured employee receive from EOBI?
Insured employees and their families are entitled to old-age pension (after 15 years of insurable employment), invalidity pension, survivors pension for dependents on the insured person's death, and a one-time old-age grant for those who do not meet the pension threshold.
Can an employer deduct the employee's EOBI share from their salary?
Yes. The employer is legally authorized to deduct the 1% employee share (PKR 370 at current minimum wage) from the employee's monthly wages. This deduction should be clearly shown on the payslip.
What happens if an employee works for less than a full month?
If an employee joins or leaves mid-month, EOBI contributions are generally still owed for that month as long as the employee was on payroll during that period. Consult the EOBI regional office for specific pro-rata guidance in your sector.
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