Working Hours and Overtime Pay in

Pakistan
According to the law, your normal working hours per day are 8 hours and these should not be
more than 48 hours per week. By including the lunch and prayer time in hours of work, working
hours should not be greater than 9 hours a day.
What are the laws in Pakistan relating to working hours?
We have six different laws that set the working hours, rest intervals and different types of
holidays. These are:

Factories Act, 1934 (applicable in ICT, Sindh, and Balochistan)

Factories Act, 1934 (adapted for the Province of Punjab by the Factories (Amendment)
Act 2012

The Khyber Pakhtunkhwa Factories Act, 2013

The Shops and Establishments Ordinance, 1965 (applicable in ICT, Sindh, and
Balochistan)

The Punjab Shops and Establishments Ordinance, 1965 (2014)

Khyber Pakhtunkhwa Shops and Establishments Act, 2015

The Industrial and Commercial Employment (Standing Order) Ordinance, 1968

(applicable in ICT, Sindh, and Balochistan)

The Industrial and Commercial Employment (Standing Order) Ordinance, 1968 (2012,
applicable to Punjab)

The Khyber Pakhtunkhwa Industrial and Commercial Employment (Standing Order) Act,
2013

Mines Act, 1923

Newspaper Employees (Conditions of Service) Act, 1973

Road Transport Workers Ordinance, 1961

Railways Act, 1890

How will I know which of these laws is applicable to establishment I am working in?
The Factories Act is applicable mainly to the manufacturing processes and is applicable on any
factory where ten or more people are working or were working on any day in the preceding 12
months. The Standing Orders Ordinance is applicable to the commercial or industrial
establishments where 20 or more workers are employed or were employed during the last 12
months. The Shops and Establishments Ordinance is applicable to all establishments irrespective
of the number of employees. So, if you are working in an establishment employing less than ten
workers, this Ordinance is applicable to your organization. The Mines Act is applicable to any
excavation where any operation for the purpose of searching for or obtaining minerals has been
or is being carried on, and includes all works, machinery, tramways and sidings, whether above
or below ground, in or adjacent to or belonging to a mine. However you will not be covered
under this act if you are engaged in the manufacturing process even on the same premises unless
it is for coke making or the dressing of minerals. The Newspaper Employees Act is applicable to
any establishment for the production, printing or publication of one or more newspapers or for
conducting any news agency or syndicate. Road Transport Workers Ordinance is applicable to
any service for carrying passengers or goods or both by road in vehicles for hire or reward.
Railways Act is applicable to all persons employed in railway whether they are intermittent or
regular employees.
Applicability
Law
Type of Establishment

Minimum
Number of
Employees

Factory/manufacturing process

10 or more
employees

The Shops and Establishments

Ordinance, 1965 (ICT, Sindh,
Balochistan)
(Punjab:2014;
KPK:2015)

All types of establishments

No minimum
number

Standing Order Ordinance, 1968 (ICT,

Sindh, Balochistan)
(Punjab:2012;
KPK:2013)

Commercial or industrial
establishments

20 or more
employees

Factories Act, 1934

(Punjab:2012; KPK:2013)

Mines Act, 1923

All types of mines

Newspaper Employees (Conditions of

Establishment for production,
Service) Act, 1973
printing or publication of one or more
newspapers
Road Transport Workers Ordinance, 1961 Any service for carrying passengers
or goods or both by road
Railways Act, 1890

Railways

What are the daily and weekly working hours? When does the overtime start and what is
rate of overtime?
According to the law, your normal working hours per day are 8 hours and these should not be
more than 48 hours per week. By including the lunch and prayer time in hours of work, working
hours should not be greater than 9 hours a day. However, keeping in mind the overtime
obligations, you may be required to work 60 hours in a week. The daily spread over of working
hours for adult workers will be 12 hours as shown below.
Spread Over
Normal working
time

8
hours/day

Lunch/prayer time 1 hour/day Total Spread over of working hours cant be greater than 12
hours a day
Rest interval

1 hour/day

Overtime

2
hours/day

If your employer wants you to work overtime, you must be given a rest interval of 1 hour (after 8
normal working hours+1 hour for lunch and prayer). You cant be compelled to work more than
2 hours overtime a day. Your total yearly overtime work hours should also not exceed 624 hours.

Moreover, you should also be aware that lunch breaks and rest intervals are unpaid time, so you
will not be receiving any remuneration for this. You also need to know that if you are a young
person (your age is greater than 14 but less than 17 years), you can be required to work 1.5 hours
a day overtime but your total overtime hours in a year cant exceed 468 hours. If you are a
woman, you can work only up to 10:00 pm and this is only in the condition if the employer
arranges transport for pick up and drop facility.
If your employer does not arrange transport for you, your working hours must be between 06:00
a.m. to 07:00 p.m. The same working hours count for adolescents. If you are a road transport
service employee, you cant be required to work for more than 8 hours in a day and 48 hours in a
week. Moreover, after five hours of work, you are to be given at least half an hour break and if
you are required to work for over seven hours, you must have availed at least two such half an
hour intervals.
Similarly, if you are mine worker (above or below ground), you cant be required to work more
than eight hours a day and forty-eight hours a week. The spread over for workers working above
ground is 12 hours however for the workers below ground the spread over is fixed at 8 hours
which also means that they cant be required to work overtime. During the month of Ramazan,
the working hours are reduced by two hours in all establishments. Notifications are also issued in
this regard. Women workers are not allowed to work more than 9 hours in any day (this included
lunch and rest).
What is the overtime pay and how I become eligible for it?
Every employee in a factory, except those employed in clerical or executive capacity, is eligible
for the overtime pay. If you work for more than 8 hours in a day or more than 48 hours in a week
(while working in a non-seasonal factory), you are eligible for this extra/overtime pay. If you are
working in a seasonal factory, you can't be eligible for overtime rate of pay unless you work for
more than 50 hours in a week. The rate of overtime pay is double the ordinary rate of pay. You
are under obligation to work overtime whenever (so, it is not voluntary) the employer requires
you to do so. However, in case you can't perform overtime work you are supposed to offer
sufficient causes/reasons regarding your inability to do so.
The same rules are applicable if you are employed under Mines Act or Newspaper Employees
Act or Road Transport Workers Ordinance. However, if you are employed under Railways Act,
and in case of exceptional pressure of work you will be paid overtime not lower than one and a
quarter time (1.25) your ordinary rate of pay.
Overtime Rates under Different Laws
Law

Overtime Rate

All employment laws (except Railways Act)

Double the rate of pay (2X)

Railways Act

One and a quarter time (1.25X)

How is overtime calculated?

The first thing to remember is that your overtime is calculated on the basis of your ordinary pay
or gross salary. Considering that you work in an organization other than Railways, your overtime
rate is twice the rate of ordinary pay. Consider the following case.
Your monthly wage: PKR 13,000 (you are minimum wage worker)
Normal working hours: 8 hours/ day ( 48 hours a week)
Working days in a month: 26 days (one weekly holiday)
Total Overtime hours that you worked: 20 hours
Here is the formula:

Similarly, you can calculate your overtime payments by incorporating 1.25 in place of 2, if you
are a railway worker.
Does the law provide for rest intervals?
Yes, your employer has to give you rest interval of an hour after every six hours of work or you
cant be compelled to work more than five hours before rest interval of at least half an hour. If
your employer wants you to work more than eight and a half hours, you must be given at least
two intervals each of half an hour.
View this article in Urdu
Are you getting minimum wage and overtime rates as notified by the Government? You can now
inform us about the minimum wage violations at your workplace by submitting a complaint
form. With your information, Workers Employers Bilateral Council of Pakistan (WEBCOP) and
Wage Indicator Pakistan will sort out the matter between you (trade union, workers) and the
Employer. Complaint forms are available in PDF and online version.

Profit Bonus in Pakistan

Bonus is the share of employees in the profit of an employer. It is paid to the employees in
recognition of the good services rendered by them while serving the organization. However,
Bonus is conditional on the profitability of a firm.
What is Bonus?
Bonus is the share of employees in the profit of an employer. It is paid to the employees in
recognition of the good services rendered by them while serving the organization. However,
Bonus is conditional on the profitability of a firm. If no profit is made by the firm, then no bonus
whatsoever is payable. It is also termed as Statutory or Profit Bonus as it is regulated by law and
is also dependent upon profitability of firm in that specific year
Before 1972, Bonus was paid by an employer either on voluntary basis or in consequence of an
award by a labor court. However, in 1972, payment of bonus was made a legal obligation.
Standing Order 10-C was added in the West Pakistan Industrial and Commercial Establishments
(Standing Orders) Ordinance 1968. Bonus is now a statutory right for workers who have worked
at least 90 days in an organization in the previous year. Statutory or Profit Bonus is different
from other bonuses that workers may receive on the basis of "production, attendance, Eid". The
payment of those bonuses is not governed by section 10-C of the Standing Orders Ordinance.
The relevant laws governing Bonus in private sector are:

West Pakistan Industrial and Commercial Establishments (Standing Orders) Ordinance,

1968 (Standing Order 10-C)

Payment of Wages Act, 1936

Factories Act, 1934

Shops and Establishments Ordinance, 1969

Who is entitled to be paid bonus?

A worker is entitled to Profit Bonus if the following three conditions are satisfied.
1. West Pakistan Industrial and Commercial Establishments (Standing Orders) Ordinance 1968 is
applicable to that establishment (whether commercial or industrial) i.e. it must have the
minimum number of workers as mentioned above

2. A person has to be a workman as defined in Standing Orders Ordinance 1968. A workman is

any person employed in any industrial or commercial establishment to do any skilled or
unskilled, manual or clerical work for hire or
reward.
3. The minimum qualifying employment period is 90 days or above.
4. The establishment must have declared profit in the year for which bonus is to be awarded.
There should be net profit after allowing for all working costs/charges
According to section 10-c of the Standing Orders Ordinance 1968, workmen who have been in
employment of the employer in that year for a continuous period of at least 90 days are eligible
for payment of bonus.
However, length of employment over 90 days appear irrelevant in calculation f award if bonus to
any employee. All workers who have worked over 90 days, whether permanent or temporary, are
eligible for bonus in that year. A worker who has only worked hundred days in a bonus year will
get the same bonus as another workman who has worked the whole year in that organization.
However, bonus would be similar only if they draw equal wages. Hence, Bonus is not paid on
the pro-rata basis i.e. higher bonus for those who served a longer period of time and vice versa.
Who is a "workman" under the Act?
According to section 2(i) of the Standing Orders Ordinance 1968, "workman is any person
employed in any industrial or commercial establishment to do any skilled or unskilled, manual or
clerical work for hire or reward". It means that it is the nature of work or job description that has
to be considered. If a substantial part of an employee's job is manual or clerical; he would be
considered a workman under the act and thus eligible for profit bonus.
Pay or designation/post in determining whether an employee is a workman would be immaterial.
For example, a post may appear supervisory; however, the incumbent may be performing manual
or clerical work.
Which Organizations are liable to pay Profit Bonus to their workers?
In accordance with section 1(4) of the Standing Orders Ordinance, 1968, every industrial and
commercial establishment, employing 20 or more workers, is required to pay profit bonus to a
worker once he/she has met the minimum criteria and the establishment has declared profit in
that year. The table below shows all the organizations liable to pay Profit Bonus to their workers.
Commercial Establishments
Advertising/commission/forwarding
Agency,
clerical department of a factory,

Industrial Establishments
Factory
Railways

Minimum Number of
Workers
At least 20 workers must
be employed by the
organization in the

joint stock company,

Insurance company, banking company,
bank,
broker office, stock exchange,
Club, hotel, restaurant,
Cinema, theater,
Other organizations as declared and
notified by the government

Tramway or motor omnibus

service
Inland steam vessel
Dock, wharf
Mine, quarry or oilfield
Plantations
Workshop or other
establishments where
articles are produced and
preceding continuous 12
adapted for further use
months
Establishment of a
contractor
Establishment in
connection with
construction industry
Other organizations as
declared and notified by the
government

An establishment to which the Standing Orders Ordinance applies continues to be governed by

the Ordinance even when the number of person employed therein falls below 20 workers.
Are the establishments in public sector covered by the Act?
According to section 1(4), Standing Orders Ordinance 1968 is not applicable to the employees of
any public sector establishment provided that statutory rules of service, conduct and discipline
are applicable to these establishments. In the absence of statutory rules of service, either the
government establishment will form its own rules or apply current labor laws. This includes
establishment administered by the federal or provincial governments.
Are only current workers entitled to bonus?
The law requires that all those "workers who have been in employment in that year for a
continuous period of at least 90 days" are eligible for profit bonus. So, it includes all the workers
(working currently in the establishment) or those who left the organization before announcement
and declaration of profit by the employer. It is the responsibility of an establishment to locate
those workers
Can an employee be held ineligible for payment of Bonus?
An employee, irrespective of his designation and pay, so long as he falls within the definition of
workman by nature of his work (manual or clerical in nature), would be eligible for payment of
bonus.

Is a seasonal worker entitled to get bonus?

As discussed above, the only requirement is that the employee should have worked in an
establishment for a period of at least 90 days in a financial year. Therefore, if a seasonal worker
has worked in an establishment for more than 90 working days, he is entitled to get bonus.
What is the meaning of customary bonus?
Customary bonus is bonus which is being paid by way of tradition or custom at a uniform rate
(e.g. on Eid) over a number of years but has no link with profit. Profit bonus is different from
and is in addition to other bonuses payable to a workman. Even when a customary bonus or
bonus decided by a labor court as an award or settlement is linked with profits a firm, workers
will get only one bonus.
What is the time limit for making payment of bonus to the employees?
In a profitable year, bonus must be paid within a period of 3 month from the closing of the
financial year. It is not permitted to delay payment of bonus due to any reason including nonfinalization of accounts, lack of ready funds and dislocation of work.
How is Bonus Calculated?
According to the law, bonus is paid on the profit and its distribution would be as follows:

If profit is less than total/aggregate of one month wages of workmen, 15% of the profit
would be distributed among the eligible workmen

If profit is equal to the total/aggregate of one month wages of workmen, 30% of the profit
would be distributed among eligible workmen as bonus

If profit is greater than the total/aggregate of one month wages of all workmen, at most
30% of the profit would be distributed among eligible workmen as bonus

Consider the following example.

Aggregate of One Months Wages of
Workmen
(Rs.)

Employers Profit

Profit Bonus for Workers

(Rs.)

(Rs.)

350,000.00

1,600,000

480,000.00

1,400,000

420,000.00

1,200,000

360,000.00

1,166,670

350,001.00

1,000,000

300,000.00

850,000

255,000.00

520,000

156,000.00

400,000

120,000.00

350,000.00

105,000.00

200,000.00

30,000.00

150,000

22,500.00

100,000

15,000.00

Total eligible workers employed by the establishment are 30, drawing an aggregate salary of Rs.
350,000 per month.(20 workers drawing a total monthly salary of Rs. 200,000 and 10 workers
drawing an aggregate monthly salary of Rs. 150,000)
When employers profit is lower than the monthly aggregate salary of all employees, 15% of
profit is distributed among workers as a bonus. Similarly, when profit is equal to or higher than

the aggregate of one month wages of workers, 30% of the profit is distributed among workers as
a Bonus.
How bonus is shared among individual workers?
In accordance with section 10-C of the Standing Orders Ordinance, ratio of bonus to the monthly
wages is same as the ratio of total bonus payable to the aggregate of all workmen's wage for one
month.
In the above example, when aggregate one month wages are Rs. 350,000 and profit of the
employer is Rs. 1,000,000 (10 lakh), the profit bonus is Rs. 300,000. The Profit Bonus is 85.71%
of aggregate one month wages for workmen (Rs. 300,000/350,000). Hence, bonus payable to the
workmen would be 85.7% of their wages. Bonus payable to a worker (with monthly gross salary
of Rs. 20,000) would be Rs. 17,140 (20,000*.857).
It is relevant to mention here that wages here mean gross wages including all allowance of
regular and permanent nature. However, profit bonus is not part of the wages as it is contingent
in nature i.e. dependent on profitability of the firm.
What is the mode of payment for Profit Bonus?
According to the Standing Orders Ordinance, profit bonus can be paid either in the form of cash
or National Investment Trust Units of equivalent value.
Complete our Salary Survey and Win a Wage!
Are you getting minimum wage and overtime rates as notified by the Government? You can now
inform us about the minimum wage violations at your workplace by submitting a complaint
form. With your information, Workers Employers Bilateral Council of Pakistan (WEBCOP) and
Wage Indicator Pakistan will sort out the matter between you (trade union, workers) and the
Employer. Complaint forms are available in PDF and online version.

Minimum Wage in Pakistan 2016-17

Minimum wage in Pakistan. Find out the current minimum wage in Punjab and Sindh Province.
Wage rates in Ready Made Garment, Construction, Agriculture and many more Industries.

Minimum Wage in Pakistan for Unskilled Workers in 2016-2017

The Punjab Chief Minister, Mr. Shahbaz Sharif, announced on the May Day to raise the
minimum wage rate for unskilled workers from Rs. 13,000 to Rs. 14,000 per month with effect
from July 2016 (The same was reiterated by the Finance Minister - Dr. Ayesha
Ghaus Pasha- while presenting the budget on 13 June 2016). The Finance Minister (Mr. Ishaq
Dar) while announcing the Federal Budget (2016-17) on 03 June 2016 has raised the minimum
wage rate for unskilled workers from Rs. 13,000 to Rs. 14,000 per month with effect from July
2016 (applicable to Islamabad Capital Territory). The Sindh Finance Minister (Syed Murad Ali
Shah) while announcing the Sindh Budget (2016-17) on 11 June 2016 has raised the minimum
wage rate for unskilled workers from Rs. 13,000 to Rs. 14,000 per month with effect from July
2016. The Khyber Pakhtunkhwa Finance Minister (Mr. Muzaffar Said) while announcing the
KPK Budget (2016-17) on 14 June 2016 has raised the minimum wage rate for unskilled workers
from Rs. 13,000 to Rs. 14,000 per month with effect from July 2016. The Khyber Pakhtunkhwa
Finance Minister (Mr. Muzaffar Said) while announcing the KPK Budget (2016-17) on 14 June
2016 has raised the minimum wage rate for unskilled workers from Rs. 13,000 to Rs. 14,000 per
month with effect from July 2016. The Balochistan Chief Minister (Nawab Sanaullah Khan
Zehri) while announcing the Budget (2016-17) on 19 June 2016 has raised the minimum wage
rate for unskilled workers from Rs. 13,000 to Rs. 14,000 per month with effect from July 2016.
Minimum Wage in Punjab for the year 2015-2016

Minimum Wage in Industries A to C

Minimum Wage in Industries D to H

Minimum Wage in Industries I to P

Minimum Wage in Industries R to S

Minimum Wage in Industries T to Y

For more details about Minimum Wage in Punjab Province, see the Minimum Wage
Notification.
More Information on Minimum Wage in Pakistan
Minimum Wage is the wage level (set by Government, either after consultation with the social
partners i.e. worker organizations and employer associations or unilaterally) below which it is
illegal for the employer to pay his/her employees.
Minimum Wage in Pakistan is set by the following two acts:

Pakistan Minimum Wages for Unskilled Workers Ordinance, 1969 (no longer in use after
the 18th Amendment)

The Minimum Wages Ordinance, 1961 (applicable in ICT, Sindh & Balochistan)

The Khyber Pakhtunkhwa Minimum Wages Act, 2013

The Minimum Wages Ordinance, 1961 (adapted in Punjab by 2012 Amendment Act)

In June 2015, the Federal Government has raised the minimum wage from Rs. 12,000 to Rs.
13,000 per month for unskilled workers. This decision was also repeated in the budgets presented
by the Provincial Governments of Punjab, Sindh & Balchistan. The Khyber Pakhtunkhwa
province has also notified its minimum wage as Rs. 12,000. The minimum wage rate for
unskilled & juvenile (14 years to 17 years) workers is Rs.13,000 per month in the provinces of
Punjab, Sindh, and Balochistan as well as the Islamabad Capital Territory. These minimum wage
rates are applicable from 01 July 2015. The daily minimum wage for an 8 hour work day is Rs.
500 (and Rs.13,000 for 26 working days). Minimum wage for unskilled & juvenile workers
(14 years to 18 years) is notified as Rs.12,000 per month in Khyber Pakhtunkhwa with effect
from 01 July 2014. The daily minimum wage in Khyber Pakhtunkhwa is Rs.461.54 (and
Rs.12,000 for 26 working days).The Khyber Pakhtunkhwa Government had fixed a higher
minimum wage in 2014 (Rs. 15,000 per month) however it was fixed unilaterally by the
Government without forming and consulting the Minimum Wage Board. This notification was
suspended in March 2015 by the Peshawar High Court. The new notification, declaring Rs.
12,000 as minimum wage for unskilled workers has been issued in September 2015 and is
effective from back date. Khyber Pakhtunkhwa again issued a minimum wage notification in
January 2016 declaring the minimum wage as Rs. 13,000 with effect from July 2015.
Minimum Wages for Unskilled Workers used to be fixed under the 1969 Ordinance however
after devolution of Ministry of Labour to provinces, the wages are announced under Minimum
Wages Ordinance, 1961 which applies to all industrial establishments employees (whether
skilled, unskilled or apprentices and even domestic workers) but it excludes the employees of
Federal or Provincial governments, coamine employees or persons employed in agriculture.
There is yet another law that provides for minimum wage fixation for coal mine workers i.e. The
Coal Mines (Fixation of Rates of Wages) Ordinance 1960. Provincial Governments issue
minimum wage notifications for these coal miners and they may also consult Mines Welfare
Board in wage fixation (but it is not necessary)
As for the Minimum Wages Ordinance, 1961, specially constituted tripartite provincial minimum
wage boards recommend minimum wage rates to the provincial governments. These tripartite
(i.e. where three social partners; worker, employer and government; meet, discuss and solve
work related issues together) boards are constituted at the provincial level and they are entrusted
with the statutory task of recommending the minimum wage rates for time work; piece work;
overtime work; work on weekly rest day; paid holidays and the minimum time rates for workers
employed on piece work so as to guarantee minimum wages for such workers on a timely basis.
The status of provincial minimum wage boards is only advisory and the power rests with the
provincial government to declare these wages. These recommendations become enforceable only
when accepted and notified by the respective provincial governments. The Minimum Wage

Boards can also periodically review these wages and recommend any amendments to their
respective governments however authority again rests with the government whether it adopts and
give these recommendations a legal status.

Minimum Wages for Unskilled Workers in Pakistan (over the last 15 years)

Year

Wage per month (PKR)

Single National Minimum Wage for unskilled workers

1998

1,950

2001

2,500

2005

4,000

2007

4,600

2008

6,000

Provincial Minimum Wage for unskilled workers (after Devolution of the subject of
Labour in 2010)

2010

Sindh, Khyber Pakhtunkhwa, Balochistan: 7,000

(Punjab: 8,000)

2012

Sindh, Khyber Pakhtunkhwa, Balochistan: 8,000

(Punjab:9,000)

2013

Punjab, Sindh, Khyber Pakhtunkhwa, Balochistan:

10,000

2014

Punjab, Sindh, Khyber Pakhtunkhwa, Balochistan:

12,000

2015

Punjab, Sindh, Khyber Pakhtunkhwa, Balochistan and

ICT: 13,000
The Minimum Wage in
Khyber Pakhtunkhwa was earlier declared as PKR
12,000 however it was raised to 13,000 in January 2016
with effect from July 2015.

2016

Punjab, Sindh, Khyber Pakhtunkhwa, Balochistan and

ICT: PKR 14,000 (with effect from 01 July 2016)

Pay and Income Tax in Pakistan

Income Tax is the tax that you pay on your income. Income Tax is paid by wage earners i.e.,
salaried class, self-employed and non-incorporated firms. Income Tax is one of the important
sources through which a government finances its activities.
Income Tax is the tax that you pay on your income. Income Tax is paid by wage earners i.e.,
salaried class, self-employed and non-incorporated firms. Income Tax is one of the important
sources through which a government finances its activities.
What is Income Tax?
Income Tax is the tax that you pay on your income. Income Tax is paid by wage earners i.e.,
salaried class, self-employed and non-incorporated firms. Income Tax is one of the important
sources through which a government finances its activities. The personal income tax revenue is
only 1.1% of GDP in Pakistan (11% of total tax revenues) and only 2% of working age
population is registered as taxpayer.
Is Income Tax applicable on all of my income?
If your income is less than the exemption threshold of PKR 400,000 (whether you are a salaried
or non-salaried individual), you dont have to pay any income tax.

What is the income tax rate for women in Pakistan?

Prior to the amendments made in the year 2010 in the Income Tax Ordinance, 2001, the income
tax law used to give special and favourable treatment to the salaried women taxpayers (by
allowing a higher exemption threshold). However, after the amendment in 2010, this relief has
been withdrawn. Now there is same tax rate for both men and women salaried workers. There are
no special tax deductions or tax credits applicable only to women.
Tax treatment of married couples in Pakistan is individual based and tax schedules used to differ
slightly for men and women before 2010. The tax rate varies between 2% and 30% in Pakistan.
What are the tax rates for salaried and non-salaried individuals?
Tax calculation has been rationalized in the current fiscal year and is made simpler as compared
to last year. The current applicable tax rate for salaried workers and self-employed workers are as
follows.

Tax Rates for Salaried Individuals

S. N.

Taxable income

Tax Rate (%)

Where the taxable income does not exceed

Rs.400,000

0%

Where the taxable income exceeds Rs.400,000 but 2% of the amount exceeding
does not exceed Rs.500,000
Rs.400,000

Where the taxable income exceeds Rs.500,000 but Rs.2,000+5% of the amount
does not exceed Rs.750,000
exceeding Rs.500,000

Where the taxable income exceeds Rs.750,000 but Rs.14,500+10% of the

does not exceed Rs.1,400,000
amount exceeding Rs.750,000

Where the taxable income exceeds Rs.1,400,000 but Rs.79,500+12.5% of the

does not exceed Rs.1,500,000
amount exceeding
Rs.1,400,000

Where the taxable income exceeds Rs.1,500,000 but Rs.92,000+15% of the

does not exceed Rs.1,800,000
amount exceeding
Rs.1,500,000

Where the taxable income exceeds Rs.1,800,000 but Rs.137,000+17.5% of the

does not exceed Rs.2,500,000
amount exceeding
Rs.1,800,000

Where the taxable income exceeds Rs.2,500,000 but Rs.259,500+20% of the

does not exceed Rs.3,000,000
amount exceeding
Rs.2,500,000

Where the taxable income exceeds Rs.3,000,000 but Rs.359,500+22.5% of the

does not exceed Rs.3,500,000
amount exceeding
Rs.3,000,000

10

Where the taxable income exceeds Rs.3,500,000 but Rs.472,000+25% of the

does not exceed Rs.4,000,000
amount exceeding
Rs.3,500,000

11

Where the taxable income exceeds Rs.4,000,000 but Rs.597,000+27.5% of the

does not exceed Rs.7,000,000
amount exceeding
Rs.4,000,000

12

Where the taxable income exceeds Rs.7,000,000

Rs.1,422,000+30% of the
amount exceeding
Rs.7,000,000

Tax Rates for Self-Employed Individuals

S. N.

Taxable income

Where the taxable income does not exceed

Tax Rate (%)

0%

Rs.400,000

Where the taxable income exceeds Rs.400,000 but 7% of the amount exceeding
does not exceed Rs.500,000
Rs.400,000

Where the taxable income exceeds Rs.500,000 but Rs.7,000+10% of the amount
does not exceed Rs.750,000
exceeding Rs.500,000

Where the taxable income exceeds Rs.750,000 but Rs.32,000+15% of the

does not exceed Rs.1,500,000
amount exceeding Rs.750,000

Where the taxable income exceeds Rs.1,500,000 but Rs.144,500+20% of the

does not exceed Rs.2,500,000
amount exceeding
Rs.1,500,000

Where the taxable income exceeds Rs.2,500,000 but Rs.344,500+25% of the

does not exceed Rs.4,000,000
amount exceeding
Rs.2,500,000

Where the taxable income exceeds Rs.4,000,000 but Rs.719,400+30% of the

does not exceed Rs.6,000,000
amount exceeding
Rs.4,000,000

Where the taxable income exceeds Rs.6,000,000

Rs.1,319,500+35% of the
amount exceeding
Rs.6,000,000

What is the ratio of female income taxpayers in Pakistan?

Recent data shows that out of the population of 177 million individuals in Pakistan, only 01
million tax returns are filed in a year. Of these 1 million, 99% individual tax filers are male
whereas only 01% are females at a time when labor force participation rate for women is around
15%. It appears from the data that women are earning below the high exemption threshold (well,

it is not that high. A person earning PKR 30,000/US$ 333 per month can make PKR 350,000 in a
year). The low number of female income tax filers also signifies huge income gap between men
and women.
What does the Tax law say if I am married?
As explained above, the Pakistani tax law treats married couples at individual level and follows
individual based tax system.
Is preferential tax treatment provided to some individuals? And on what basis?
The gross tax can be reduced by a certain limit if the salaried person is a senior citizen or a full
time researcher or a teacher. In accordance with the Income Tax Ordinance, if your age is 60
years or more (or if you are a disabled person holding a National Database Registration
Authoritys Computerized National Identity Card for disabled persons) and your taxable income
does not exceed PKR 1 million, you can qualify for a 50% reduction in the gross tax. Similarly,
you can qualify for a reduction of 40% (earlier 75%) on gross tax if you are employed in a:
1. A board of education or a university recognized by HEC, including government training
and research institution
2. Non-profit education or research institution duly recognized by HEC
When pregnant, do I get paid according the law?
Under the Mines Maternity Benefits Act 1941 and Maternity Benefit Ordinance 1958, every
employed woman is entitled to a maximum of 12 weeks (around 3 months) of fully paid
maternity leave. If you are pregnant, you can take this leave six weeks before the delivery and
six weeks after the delivery.
Moreover, in accordance with the above two laws, no women can be employed (by the employer
knowingly of her situation) during the six weeks following the delivery of her child.
If you are a civil servant, you are eligible for 90 days leave (around 13 weeks) maternity leave on
full wages under Revised Leave Rules 1980.
For more information on pregnancy benefits, please see Maternity Law
When can my kids work, what is allowed? How are they protected?
The Employment Of Children Act 1991 defines child as a person below 14 years of age and an
adolescent as a person below 18 years of age. The Constitution of Pakistan also regards the
minimum age as 14 years for hazardous work. However, under the 18th amendment, even the
minimum full time working age has actually been implicitly raised up to 16 years. Article 25(A)
of the Constitution says that the state now has to provide compulsory education to all children

between the ages of five and sixteen years, which means that, a child cant be allowed to work
before 16 years of age.
Section 50 of the Factories Act prohibits employment of children (under the age of 14 years) in
any factory. Section 51 requires adolescent workers (who are above 14 years of age and below
the age of 18 years) are not allowed to work in a factory unless:

A certificate of fitness has been issued to them by a qualified medical practitioner and
that certificate is in the custody of the manager

He carries, while at work, a token making reference to such certificate

According to the Employment of Children Act (in the current form applicable only to
engagement of children in hazardous work), a child or adolescent cant work more than 7 hours a
day (it includes one hour of rest, so essentially 6 hours of work). The work has to be arranged in
such a way that after every 3 hours of continuous work, the worker can has an interval of at least
one hour of rest. A child cant be permitted or required to work between 07:00 p.m. to 08:00 a.m.
Moreover, a child cant be required or even permitted to work overtime.
For more information on Children employment, please see Child Labour
What about pay, when my partner had an accident or is ill?
The labour laws do not explicitly provide for the leave on family emergency grounds. However,
if your partner has an accident or is ill, you can take leave on compassionate grounds from your
accumulated annual leave on full or half pay.
If your partner was employed somewhere, he can also be eligible for sickness benefit or
disability/invalidity benefit. For more information, please see Workmen Compensation and
Sickness Benefits
What if my partner has a pension?
If your partner has reached retirement age (60 years), he is eligible for old age pension. He is
also eligible for invalidity pension if some sickness or occupational accidents has affected his
earning capacity. In the event of his death (while receiving any of the above pensions), you are
eligible for a survivors pension.
For more information on survivors pension, please see Social Security and Pension System in
Pakistan
Annual Leave and Holidays

Paid Vacation / Annual Leave

An employee is entitled to 14 calendar days paid annual leave, after completion of 12 months of
continuous service. (section 49-B of Factories Act). This law does not indicate whether paid
annual leave increases with longer service/senioirty. A worker is paid his daily wages while he is
on annual leave. Factory workers are paid half of the pay due for annual leave before start of the
leave. The annual leave has to be consecutive and may not be split however if a worker fails to
avail whole leave during the 12 months, it is added to the next year. However, not more than 14
days of leave can be carried forward.

Pay on Public Holidays

Workers are entitled to paid Festival (public and religious) holidays. Festival holidays are
announced by Ministry of Interior, Islamabad and Provincial Government at the start of calendar
year (usually 14 in number) (section 49-I of Factories Act)

Weekly Rest Days

Workers are entitled to 1 day of rest per week (24 consecutive hours). The weekly rest day is
usually Sunday. If a worker has to work on holiday; he cant be made to work consecutively for
10 days without being given a compensatory holiday for full one day. (section 35 of Factories
Act)

Regulations on Annual Leave and Holidays

Factories Act, 1934

The West Pakistan Shops and Establishments Ordinance, 1969

Compensation

Overtime Compensation
In accordance with the section 47 of Factories Act, 1934; if a worker works beyond the stipulated
working hours, i.e., 9 hours a day and 48 hours a week, he is entitled to an overtime pay that is
double the rate of his ordinary pay (200% of the normal wage rate). In seasonal factories,
workers may work up to 56 hours a week.

Night Work Compensation

There is no special pay premium for employees working over night.

Compensatory Holidays / Rest Days

Workers can be asked to work on weekly rest days and Festival/Public Holidays. The law does
provides for compensatory holidays. (Section 35, 49-I of Factories Act)

Weekend / Public Holiday Work Compensation

There is no provision for premium pay for woring on a weekly rest day however if an employee
works on a public holiday , he is paid at 300% of the rate of his normal wages (normal wage for
working on public holiday + paid substitute holiday + one day's paid compensatory holiday).
(section 49-I of Factories Act)

Regulations on Compensation

Factories Act, 1934

The Payment of Wages Act, 1936

The West Pakistan Shops and Establishments Ordinance, 1969

Domestic Workers in Pakistan

Domestic work is part of the huge informal sector in Pakistan. Provincial Employees Social
Security Ordinance governs the domestic workers rights.
Is there any law in Pakistan, which governs domestic workers?
Domestic work is part of the huge informal sector (around 73% of total Pakistani economy, as
indicated by official sources) and thus the existing labor laws are not applicable to this sector.
There are no clear estimates of the total number of domestic workers in the country, however,
according to a study, every fourth household in the country hires domestic worker and majority
of these workers is females (especially children). Moreover, according to an ILO Study, around
4-10% of total employment in developing countries is in the domestic work sector.
The labor laws mention domestic workers only twice. The Provincial Employees Social Security
Ordinance 1965 requires an employer to provide health care (including maternity care) to the full
time domestic workers (Section 55-A). The Minimum Wages Act of 1961 also includes domestic
workers in the definition of workers however government has not notified the minimum wages
as applicable to these workers under this law.
The first bill on domestic workers, in order to bring them under the jurisdiction of labour laws,
was drafted and presented in Senate in 2013. The Bill is still under discussion by the relevant
Senate Committee. The Bill aims to protect the rights of the domestic workers, to regulate their
employment and conditions of service and to provide them social security, safety, health facility
and welfare. It provides domestic workers with all those rights available to other formal sector
workers and creates a special domestic workers welfare fund.

How does the Provincial Employees Social Security Ordinance define domestic work?
According to this law, domestic servant is any person working whole-time in connection with
the work of any household for any consideration, whether in cash or in kind.
This law requires an employer, employing a domestic worker, to provide his domestic servant
with full medical care at his own cost. However, there is no mechanism provided in this law to
check as to whether an employer is following this requirement or not.
Can domestic workers form unions?
In accordance with article 17 of the Constitution of Islamic Republic of Pakistan, every citizen
has the right to form associations or unions, subject to reasonable restrictions imposed by law in
the interest of sovereignty or integrity of Pakistan, public order or morality. In view of above,
domestic workers are free to form associations/unions. The first even union of domestic workers
under the name of Domestic Workers Union has been registered in Lahore under the provisions
of the Punjab Industrial Relations Act, 2010 (early 2015). This Union currently has 235 members
out of which 225 are female domestic workers.
What are the common types of domestic work in Pakistan?
Domestic work employs a large part of female workers. The two most common types are child
domestic labor and bonded/forced labor. Child domestic labor is when a child (under the age of
14 years) is employed to perform a work in household. According to an ILO study (2004), there
are 264,000 child domestic workers in Pakistan. Most of these children are employed as
bonded/forced laborers working under the debt bondage. These children or women are working
to pay off the debt accrued by their parents or family members.
As per ILO considerations, this type of domestic work, where a child is working under debt
bondage, working for long hours, during the night and is unreasonably confined to the premises
of an employer, is the worst form of child labor.
What are the issues faced by domestic workers in Pakistan and worldwide?
The domestic workers face the following issues.
1. Long and unlimited hours of work
2. Heavy workload
3. Lack of legal protection
4. Violence and abuse at work, either physical or psychological

5. Forced labor/child labor and trafficking of domestic workers

6. No minimum wage protection and low salaries
7. No labour inspection and law enforcement
8. Weaker collective bargaining position
9. Poor living quarters
10. Insufficient food
11. Lack of privacy

Employment Security

Written Employment Particulars

Standing Orders Ordinance requires that every workman at the time of his appointment, transfer
or promotion should be provided with an order in writing, showing the terms and conditions of
his service. (S.O. 2-A of Standing Orders Ordinance, 1968)

Fixed Term Contracts

Pakistani labour Law prohibits hiring fixed term contract workers for tasks of permanent nature.
The maximum length of a fixed term (temporary) contract including renewals is 09 months.

Probation Period
In accordance with the Standing Orders Ordinance, probation period is of 3 months duration
only. (S.O. 1 of Standing Orders Ordinance, 1968)

Regulations on Employment Security

Factories Act, 1934

The West Pakistan Shops and Establishments Ordinance, 1969

Fair Treatment

Equal Pay
In accordance with the section 15 of the West Pakistan Minimum Wage Rules, 1962, the
principle of equal remuneration for work of equal value between men and women workers will
be applied while fixing wages. Since there is no specific law in the country to deal with the

equal remuneration, the Federal Government is working on a draft of a model Provincial law on
anti-discrimination which can be adopted by the Provincial Legislative assemblies.

Non-Discrimination
In accordance with the article 27 of the Constitution, "No citizen otherwise qualified for
appointment in the service of Pakistan shall be discriminated against in respect of any such
appointment on the ground only of race, religion, caste, sex, residence or place of birth". This
article is only about the public sector jobs. We can't locate similar provision for nondiscrimination in private sector employment. Since there is no specific law in the country to deal
with the equal remuneration and nondiscrimination in all employment related matters, the
Federal Government is working on a draft of a model Provincial law on anti-discrimination
which can be adopted by the Provincial Legislative assemblies.

Equal Choice of Profession

Women can't work in the same industries as men (Factories Act, 1934). Moreover, section 27 of
Constitution of Pakistan 2010 also provides for gender based occupational segregation by saying
that " specified posts or services may be reserved for members of either sex if such posts or
services entail the performance of duties and functions which cannot be adequately performed by
members of the other sex".
Quite contrary to above provisions, article 18 of the Constitution gives every citizen the right to
enter upon any lawful profession or occupation, and to conduct any lawful trade or business
subject to qualification and licensing requirements.

Regulations on Fair Treatment

The Constitution of Pakistan, 1973 (amended in 2012)

West Pakistan Minimum Wage Rules, 1962

Protection Against Harassment of Women at Workplace Act, 2010

Family Responsibilities

Paternity Leave
There is no provision in the law on paid or unpaid paternity leave. Paternity Leave is provided
under Revised Leave Rules, 1981 in the Punjab province. New fathers are granted maximum 7
days of paternity leave on or immediately before the birth of a child. This leave is admissible
only two times during the entire service.

Parental Leave
There is no provision in the law on paid or unpaid parental leave.

Flexible Work Option for Parents / Work-Life Balance

No provisions could be located in the law supporting work-life balance for parents or workers
with family responsibilities.

Regulations on Family Responsibilities

Factories Act, 1934

The West Pakistan Shops and Establishments Ordinance, 1969

Health and Safety

Employer Cares
Chapter 3 of Factories Act makes it obligatory on the employer to provide for safe and healthy
working environment to the workers. (Section 13-33Q)

Free Protection
No specific provision in the laws on provision of protective clothing, however Labour Protection
Policy 2006 directs the enterprises to provide workers with protective clothing and equipment. In
the same way, Factories Act, 1934 (section 23-A) provides for compulsory vaccination and
inoculation of workers and expenses are to be borne by employer.

Training
In accordance with the Factories Act, it is the responsibility of an employer to provide
instruction, training and supervision as is necessary to ensure health and safety at work of his
employees. (Section 38)

Labour Inspection System

labour laws provides for an independent labour inspection system in the country. However, the
inspection system is province based and there is no central inspection authority.

Regulations on Health and Safety

Factories Act, 1934

Workmen's Compensation Act, 1923

Mines Act, 1923

Dock Labourers Act, 1934

Maternity and Work

Maternity Leave
Female employees are entitled to a maximum of twelve weeks (or 3 months) of maternity leave
with full pay. The six-week post natal leave is compulsory. (Section 4 of West Pakistan Maternity
Benefit Ordinance, 1958). The maternity leave in public sector is also 90 days (3 months) and
during this time, wages are paid in full.

Income
The maternity leave is awarded with full pay. The qualifying condition is that the women must be
working in enterprise at least four months prior to the date of delivery of her child.(Section 4 of
West Pakistan Maternity Benefit Ordinance, 1958)

Free Medical Care

In accordance with section 38 of The Provincial Employees Social Security Ordinance, 1965, a
woman is entitled to entitled to prenatal confinement and post-natal medical care, if she is
entitled to maternity benefit under section 36.

Regulations on Maternity and Work

The West Pakistan Maternity Benefit Ordinance, 1958

The Mines Maternity Benefit Act, 1941

The Provincial Employees Social Security Ordinance, 1965

Pakistan Labour Report

Pakistan Labour Reports brings you daily news on the latest happenings in
Pakistan Labour Market. Get daily news on:

Bonded/Forced Labour

Child Labour

Disabled Workers

Equality and Non-discrimination

Informal Sector

Labour Institutions

Employment

Migration - Human Trafficking News

Social Security and Pensions

Trade Union

Wages and Income

What is service Pakistan Labour Report Service about:

The service provides you with reliable and analytical coverage of labour laws, case laws i.e.
court decisions and country wide labour related news.
What does it offer:
It provides you with

The up to date labour legislation and case laws in the country.

All the Governmental reports, statistics relating to labor and employment

issues

Labour related news and developments country wide

International Reports on Pakistan relating to the labour and employment

issues

In essence, you get there is to know about the functioning of labour market in
Pakistan

Whether you are a lawyer, a researcher, a government institution or a civil society organization
wanting to monitor the compliance of national labour laws and international labour standards, a
manager or a student of industrial and labour relations, you will find Pakistan Labour Report
equally helpful.
Format and Frequency of Reports
Pakistan Labour Report is updated weekly (Wednesdays).
Pakistan Labour Report section conceptualized by Iftikhar Ahmad, member www.paycheck.pk
team.

Sick Leave

Income
Every secured worker certified by a medical practitioner is entitled to paid sick leave (sickness
benefit) for a period of 121 days (in a calendar year) in case of ordinary ailments and 365 days
(in a calendar year) in case of Cancer or Tuberculosis. The sickness benefit for ordinary ailments
(for a period of 121 days) requires the employer to pay 75% of wages last drawn while for
Cancer and Tuberculosis (for a period of 365 days), a worker has to be paid 100% of last wages
drawn (Different provisions in provinces). If there is an employment related injury, a worker has
the right to draw 100% wages for a period of 180 days. (section 35-39 of The Provincial
Employees Social Security Ordinance, 1965)

Medical Care
Medical benefits are available for insured workers and these include general medical care,
specialist care, medicine, hospitalization, maternity care, and transportation.

Job Security
As per section 72 of The Provincial Employees Social Security Ordinance, 1965, an employer
can't dismiss, discharge, reduce or otherwise punish a worker during his/her period of sickness,
maternity, injury or medical care.

Regulations on Sick Leave

Industrial And Commercial Employment (Standing Orders) Ordinance, 1968

The Provincial Employees Social Security Ordinance, 1965

Workmen's Compensation Act, 1923

Social Security

Pension Rights
Social security laws provide for both full and partial/early pension. For full pension, a worker
must have attained 60 years of age (55 years for women) with at least 15 years of contributions.
A reduced pension is paid to the workers with ages from ages 55 to 59 (men) or ages 50 to 54
(women) with at least 15 years of contributions. Old-age pension is 2% of the insured worker's
average monthly earnings in the last 12 months multiplied by the number of years for which
contributions have been made. As for the early/partial pension, full pension is reduced by 0.5%
for each month that the pension is taken before retirement age (So, a worker taking pension after
55 years of age gets only 70% of the full pension). If a worker does not meet requirements of full

or partial pension, there is also an old-age grant. The minimum monthly pension from EOBI has
been raised from Rs. 3,600 to Rs. 5,250 per month, effective from 01 April 2015.
(Section 22 of the Employees' Old Age Benefits Act, 1976)

Dependents' / Survivors' Benefit

Social Security laws provide for survivor benefit (these include dependents including widow,
widower, children). The deceased worker must be a pensioner at the time of death. 100% of the
deceased minimum pension is distributed equally among deceased's spouses. If spouses are not
alive, this is distributed among orphans. In the absence of spouse and orphans, deceased's parents
are paid this pension up to 5 years after the death of a worker. The minimum monthly pension
from EOBI has been raised from Rs. 3,600 to Rs. 5,250 per month, effective from 01 April 2015.
(Section 22-B of the Employees' Old Age Benefits Act, 1976)

Invalidity Benefit
The above acts provide for invalidity benefit in the case of non-occupational
accident/injury/disease resulting into permanent invalidity. If a worker is assessed with 67% loss
in earning capacity, he/she is paid 2% of the average monthly earnings in the last 12 months
multiplied by the number of years of covered employment. The minimum monthly pension from
EOBI has been raised from Rs. 3,600 to Rs. 5,250 per month, effective from 01 April 2015.
(Section 23 of the Employees' Old Age Benefits Act, 1976)

Regulations on Social Security

The Provincial Employees Social Security Ordinance, 1965

Employees Old Age Benefits Act, 1976

Trade Unions

Freedom to Join and Form a Union

Constitution and labour law provide for freedom of association and allow workers and employers
to join and form unions. (Section 3 of Industrial Relations Act 2012). Constitution also supports
freedom of association, subject to any reasonable restrictions imposed by law in the interest of
sovereignty or integrity of Pakistan, public order or morality (art. 17). IRA 2012 includes many
exclusions which in effect deprive workers of the right to form and join unions.

Freedom of Collective Bargaining

Inudstrial Relations Act 2012 (section 19 onwards) allows employees to bargain collectively
through their representatives.

Right to Strike
Right to strike is not considered as fundamental right. Moreover, go-slow actions are consider an
unfair labour practice, strikes longer than 30 days can be prohibited by government order, and a
party or the government can unilaterally compel arbitration, undermining the right to strike
(Industrial Relations Act 2012, section 41-48).

Regulations on Trade Unions

The Constitution of Pakistan, 1973 (amended in 2012)

Industrial Relations Act, 2012

Work and Wages

Minimum Wage
Wages, as defined under the Minimum Wages Ordinance 1961, mean all remuneration,
expressible in monetary terms, and payable to a person on fulfillment of the express or implied
terms of employment contract but does not include contributions paid by the employer on behalf
of the worker under any scheme of social insurance, pension fund or provident fund; travelling
allowance or value of any travelling concession; amount paid to defray special expenses incurred
by the worker in respect of his employment; any sum paid as annual bonus; or any gratuity paid
on contract termination.
The minimum wage rate for unskilled & juvenile (14 years to 17 years) workers is Rs.13,000 per
month in the provinces of Punjab, Sindh, and Balochistan as well as the Islamabad Capital
Territory. These minimum wage rates are applicable from 01 July 2015. The daily minimum
wage for an 8 hour work day is Rs. 500 (and Rs.13,000 for 26 working days). Minimum wage
for unskilled & juvenile workers (14 years to 18 years) is notified as Rs.12,000 per month in
Khyber Pakhtunkhwa with effect from July 2014. The daily minimum wage in Khyber
Pakhtunkhwa is Rs.461.54 (and Rs.12,000 for 26 working days)
Minimum wages for semi-skilled, skilled and highly skilled workers are determined by the
Minimum Wage Boards constituted under the Minimum Wages Ordinance, 1961. The detailed
Minimum Wage notifications for different industries based in the provinces are issued later by
the provincial labour departments. One such detailed notification has been issued by the Punjab
Labour & Human Resource Department on 7 August 2015. The said notification provides
minimum wage rates for ministerial, highly skilled, semi-skilled and skilled workers in the 102
industries based in the province. Similar detailed notifications have yet to be issued by the other
Provincial governments.

For the last couple of years, the trend has been to increase workers' minimum wages while
announcing the federal and provincial budgets instead of announcing a wage increase for private
sector on May Day. In his Federal Budget 2015-16 speech, the Federal Finance Minister
announced the increase of minimum wage for private sector workers from PKR12,000 to
PKR13,000 per month. The Provincial Budgets in all the Provinces except Khyber Pakhtunkhwa
followed suit and increased minimum wage for unskilled workers in line with the increase
announced by the Federal Government.
Minimum Wages for Unskilled Workers used to be fixed under the Minimum Wages for
Unskilled Workers Ordinance 1969 however after devolution of Ministry of Labour to provinces,
the wages are announced under section 6 of the Minimum Wages Ordinance, 1961 (the Khyber
Pakhtunkhwa Minimum Wages Act, 2013) which applies to all industrial establishments
employees (whether skilled, unskilled or apprentices and even domestic workers) but it excludes
the employees of Federal or Provincial governments, coalmine employees or persons employed
in agriculture. The minimum wage rates for coal mine workers are determined under the Coal
Mines (Fixation of Rates of Wages) Ordinance 1960 (in consultation with Mines Welfare
Boards).
For newspaper employees, wages are determined under the Wage Board Award and wages are
fixed by the Wage Board (constituted specifically for that purpose) while taking into
consideration the cost of living, the prevalent wage rates in comparable employment,
circumstances relevant to the newspaper industry in different regions of the country as well any
other reasons that the Boards considers appropriate and relevant. 7th Wage Board Award,
announced in 2001, could not be implemented. The 8th Wage Board was constituted in
September 2013 however no award has been announced yet. The Wage Board, having equal
representation of newspaper workers and employers, are constituted under Newspaper
Employees (Conditions of Service) Act 1973.
Sources: 4-6 of the Minimum Wages Ordinance, 1961; 4-6 of the Khyber Pakhtunkhwa
Minimum Wages Act, 2013; 10-12 of the Newspaper Employees (Condition of Service) Act,
1973; 3-5 of the Coal Mines (Fixation of Rates of Wages) Ordinance, 1960
The current minimum wage rates can be found in Minimum Wage Section.

Regular Pay
Wages can be paid on daily, weekly, fortnightly or monthly basis. However, a wage period can't
exceed one month. The detailed instructions on payment of wages are found in Payment of
Wages Act, 1936 and Khyber Pakhtunkhwa Payment of Wages Act, 2013. A factory, railway or
industrial or commercial establishment employing less than 1,000 workers is liable to disburse
pay to its employees before the expiry of seventh day from the last day of wage period. However,
the establishment employing more than 1000 workers can delay the disbursement of pay up till

the 10th day from the last day of wage period. The law also requires that wages are to be paid on
a working day and in current coin or currency notes only. This also means that wage payments
by organizations through cheque are not permitted under the law. In order to ensure that workers
are paid their wages as specified under the law or employment contract or memorandum of
settlement (referred to generally as collective bargaining agreement), necessary amendment in
Payment of Wages Acts is needed. It must however be specified that the Khyber Pakhtunkhwa
Payment of Wages Act requires payment of wages in current currency through scheduled banks
the manner of which is yet to be prescribed under the Rules. Employer is required to display, in a
conspicuous place at or near the main entrance of the factory, a notice, in English and in the
language of majority of the persons employed therein, showing for at least two months in
advance, the day on which wages are to be paid.
Sources: 3-6 of the Payment of Wages Act 1936; 3-6 of the Payment of Wages Act 1936,
adapted by Punjab in 2014; 3-6 of the Khyber Pakhtunkhwa Payment of Wages Act, 2013; Rule
8 of the Payment of Wages Rules 1960
Deductions & Fines
According to the Payment of Wages Act, following deductions can be made from a worker's
wages.

Fines;

Deductions for absence from duty; Law considers it a breach of contract when
ten or more persons, through concerted action, absent themselves from
office without due notice and reasonable cause. The law entitles the
employer to make deductions up to eight days of wages when employees
take such an action. However, the law exempts women and workers (under
the age of 15 years) from such wage deduction for contract breaches.

Deductions for damages to or loss of goods expressly entrusted to the

employed person for custody, or for loss of money for which he is required to
account, where such damage or loss is directly attributable to his neglect or
default;

Deductions for house accommodation supplied by the employer

Deductions for such amenities and services supplied by the employer as the
Provincial Government may by general or special order authorize;

Deductions for recovery of advances or for adjustment of overpayment of

wages;

Deductions of income tax payable by the employed person;

Deductions required to be made by order of a Court or other authority

competent to make such order;

Deductions for subscriptions to, and for repayment of advances from, any
approved Provident Fund;

Deductions for payment to co-operative societies approved by the Provincial

Government or to a scheme of insurance maintained by the Pakistan Post
Office;

Deductions made with the written authorization of the employed person, in

furtherance of any war saving scheme approved by the Provincial
Government.

Under the minimum wage notification issued by the Government of Punjab, the deductions for
providing housing accommodation (Rs.162 per month) and transport facility (Rs.33 per month)
are allowed subject to the agreement between the worker and employer. However, in other
Provinces especially in Khyber Pakhtunkhwa, no variable or incentive allowance (non-statutory)
or value of welfare facilities including house rent allowance or free house and conveyance can be
adjusted against the minimum wage rates.
Fines can be imposed on employees in respect of certain acts and omissions but these are to be
specified and previously approved by the Government. A notice of such acts has to be exhibited
in the premises at some conspicuous place (like near factory entrance). Fines can be imposed for
only those acts contained in the notice and a contravention of this provision is deemed to be an
unauthorized deduction which is a liable offence. The total amount of fine in a single wage
period (which can be maximum 30 days) cant exceed 3% of the wages payable to the worker.
The fine imposed has to be recovered in lump sum and has to be recovered within sixty days of
the commission of an act or omission. Fines cannot be imposed on workers under the age of 15
years.
Sources: 7-13 of the Payment of Wages Act 1936; 3-6 of the Payment of Wages Act 1936,
adapted by Punjab in 2014; 7-13 of the Khyber Pakhtunkhwa Payment of Wages Act, 2013;
Rule 10-16 of the Payment of Wages Rules 1962; Minimum Wage Notifications 2015
Penalties for Violation
In the event of non-payment of minimum wage or at a rate lower than the rate announced by the
Government, the following penalties are provided under the relevant laws.
Acts

Applicability (Area)

Penalties
Fines (monetary)

Imprisonment

Minimum Wages
Ordinance, 1961 (section
9)

Islamabad Capital Territory,

Sindh, Balochistan

Up to Rs.500 or

Up to 6 months or both

Minimum Wages
Punjab
Ordinance, 1961 (adapted
in 2012)

Up to Rs.20,000 or

Up to 6 months or both

(section 9)

Up to Rs.50,000 or
(on subsequent
contravention)

Up to 6 months or both

Khyber Pakhtunkhwa
Khyber Pakhtunkhwa
Minimum Wages Act, 2013

Up to Rs.20,000 but not

less than Rs.5,000 or

Up to 6 months or both

(section 9)
Other than above fines, employer is also required to pay the difference in wages actually paid to
the worker and the wages which should have been paid had there no such contravention.
Penalties are also provided under the Payment of Wages Acts for different offences by the
employer as follows:
Acts

Applicability
(Area)

Offences

Penalties

Fines
(monetary)
Payment of
Islamabad
Wages Act, 1936 Capital
Territory, Sindh,
(section 20)
Balochistan

Up to Rs.500

Section 5: Time of
Payment of Wages

Section 7:
Deductions which
may be made

Imprisonment

Payment of
Punjab
Wages Act, 1936
(adapted in
2014)

from wages

Section 8: Fines

Section 9:
Deductions for
absence from
duty

Section 10:
Deductions for
damage or loss

Section 11:
Deductions for
services rendered

Section 12:
Deductions for
recovery of
advances

(section 20)
The Khyber
Khyber
Pakhtunkhwa
Pakhtunkhwa
Payment of
Wages Act, 2013

(section 20)

Payment of
Islamabad
Wages Act, 1936 Capital
Territory, Sindh,
(section 20)
Balochistan

Payment of
Punjab
Wages Act, 1936
(adapted in
2014)

Up to
Rs.10,000

Up to
Rs.10,000 or

Up to one
month or both

Up to two
months or both
Up to
Rs.20,000 or
(on
subsequent
contravention)

Section 13:
Deductions for
payments to
cooperative
societies and
insurance
schemes

Section 4: fixation
of wage periods

Section 6: wages
to be paid in
current coin or
currency notes

Section 25(section
24 for Khyber
Up to Rs.5,000
Pakhtunkhwa Act):
Display by notice
of the abstracts of
this act

Up to Rs.200

(section 20)
The Khyber
Pakhtunkhwa
Khyber
Payment of
Wages Act, 2013 Pakhtunkhwa

Up to
Rs.10,000 or

Up to one
month or both

(section 20)

Up to
Up to two
Rs.20,000
months or both
or (on
subsequent
contravention)

Publication of Wages & Maintenance of Registers

Government has to ensure that minimum wage rates fixed under the law are publicized widely to
all workers and employers. Government may also require thee employers, to display the
minimum wage rates in prominent places in a factory, workshop or other workplace, notices in
Urdu, English or any other language specified in the order.
Employers, under the West Pakistan Minimum Wage Rules 1962, are required to maintain a
Wage Register, issue wage slips in authorized format and a Muster Roll as prescribed under the
law. A worker, within 6 months of non-payment of minimum wage on rates specified, may
submit a claim to the concerned authority for payment of arrears.
The West Pakistan Payment of Wages Rules 1962 also requires to maintain certain registers
including register of fines, register of deductions for damages or loss, register of wages, and
register of advances in prescribed formats. Employers are also required to submit an Annual
Return to the Chief Inspector of Factories before 12th of February each year with details of fines
imposed
or any deductions made from wages for breach of contract or for damage or loss.
Compliance Under the Minimum Wage Law

Requirement
Maintenance of Wages Register

Relevant Legislation
Rule 19(1) of the Minimum Wage Rules 1962

Form
Form I

Format of Wage Slips

Rule 19(2) of the Minimum Wage Rules 1962

Form II

Maintenance of Muster Roll

Rule 19(5) of the Minimum Wage Rules 1962

Form III

Compliance Under the Payment of Wages Laws

Requirement

Relevant Legislation

Form

Display of the abstract of Payment Section 25 of the Payment of Wages Act 1936
of Wages Act and rules in English
and Urdu (or a local language
understood widely by workers)
The Khyber Pakhtunkhwa Payment of Wages
Act, 2013

Register of Fines

Rule 3 of the Payment of Wages Rules 1960

Form I

Register of Deductions for Damage Rule 4 of the Payment of Wages Rules 1960
or Loss

Form II

Register of wages

Rule 5 of the Payment of Wages Rules 1960 Rule

19(1) of the Minimum Wage Rules 1962

Form I-A

Register of Advances

Rule 17 of the Payment of Wages Rules 1960

Form III

Annual Returns

Rule 18 of the Payment of Wages Rules 1960

Form IV

Regulations on Work and Wages

Factories Act, 1934

The Payment of Wages Act, 1936

Minimum Wages Ordinance, 1961

West Pakistan Minimum Wages for Unskilled Workers Ordinance, 1969 (not in
use after 18th constitutional amendment in 2010)