Paid yearly vacation leave, typically 14 working days after one year of service in Pakistan, guaranteed by the Factories Act 1934 and provincial Shops Ordinances.
Annual Leave (also called earned leave or privilege leave) is paid vacation time employees accrue for each year of service. The statutory minimum in Pakistan under the West Pakistan Shops and Establishments Ordinance 1969 is 14 consecutive days per year for employees who have completed 12 months of continuous service. Industrial workers receive the same 14 days per Section 49-B of the Factories Act 1934. Sundays and public holidays falling during the leave period are counted as part of the 14 days if the leave exceeds 4 days at a stretch.
Annual leave accrues proportionally each month — typically 14/12 = 1.16 days per month — and becomes available after 12 months of continuous service. 'Continuous service' is interrupted only by unauthorised absence of more than 10 days or strike participation; maternity, sickness, and authorised leave do not break continuity. Most Pakistani companies allow up to 14 days to be carried forward to the next year; some cap carry-forward at 10 days. Encashment of accumulated balances at separation is common practice and is specifically protected under Section 49-D of the Factories Act for factory workers.
Provincial variations matter in post-18th-Amendment Pakistan: Punjab's Shops and Establishments Ordinance 1969 and the Sindh Shops and Establishments Act 2015 both mandate 14 days, but KPK's corresponding ordinance and Balochistan's rules have minor differences on accrual timing and maximum accumulation. For federal employees, the Revised Leave Rules 1980 grant 48 days earned leave per year — much more generous than the private sector.
Senior employees often receive more generous annual leave (20 to 30 days) through contract rather than statute. IT companies, multinationals, and banks commonly grant 20–25 days to mirror global norms. These enhanced policies are enforceable once written into the appointment letter, and cannot be reduced unilaterally per the Standing Orders Ordinance 1968.
Approval typically requires advance request (2 weeks or more) and coverage arrangements. Peak leave seasons in Pakistan align with Eid-ul-Fitr, Eid-ul-Azha, school summer breaks (June–August), and year-end. HR systems should warn of overlap with peer leave, business-critical periods (e.g. FBR return deadlines for payroll teams), and statutory minimum staffing. Peoplifi tracks accrual automatically, handles Pakistan-specific carry-forward and encashment rules, and routes approval through configurable workflows including WhatsApp notifications for managers who don't live in the dashboard.
Rabia completed 14 months at her Karachi-based fintech, used 10 of her 14 annual leave days for a trip to Hunza Valley in June, carried 4 days forward to the next cycle, and — on resignation two years later — received encashment of 8 accumulated unused days at her current basic rate.
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