Hiring in Pakistan from the US? Compare EOR, entity and contractor routes and see statutory benefits, leave, contracts, payroll and onboarding.
Hashir Jamil
Growth Associate
PAKISTAN HIRING
TALENT SOURCING
CONTRACTS
EMPLOYEE BENEFITS
COMPLIANCE
PAKISTAN HIRING
TALENT SOURCING
CONTRACTS
EMPLOYEE BENEFITS
COMPLIANCE
PAKISTAN HIRING
TALENT SOURCING
CONTRACTS
EMPLOYEE BENEFITS
COMPLIANCE
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You’re probably weighing two questions. Should you hire in Pakistan at all and if so, how do you do it without creating a compliance problem you’ll spend a year cleaning up?
This guide covers both. It walks through the three main hiring routes and what statutory benefits and payroll obligations may apply. It also covers leave, working hours, contracts, onboarding and managing someone you may never meet in person.
Why companies hire in Pakistan
Most US companies that start hiring in Pakistan come for one of four reasons.
Talent pool
A deeper pool of talent
Pakistan has a large pool of technical and business professionals across software engineering, QA, data, design, finance, accounting, and customer support. The opportunity lies in accessing candidates who aren't necessarily visible on the job boards US founders typically use.
Team building
Beyond individual hires
Pakistan offers talent across multiple business functions, making it possible to build dedicated teams rather than rely on isolated hires. With the right structure, these teams can grow with the business, supported by consistent processes and local leadership.
Talent arbitrage
Retention advantage
Pakistan offers SMEs access to a deep talent market where competitive compensation can go further. By paying above local market rates, businesses can attract experienced professionals and build stable teams.
Talent pool
A deeper pool of talent
Pakistan has a large pool of technical and business professionals across software engineering, QA, data, design, finance, accounting, and customer support. The opportunity lies in accessing candidates who aren't necessarily visible on the job boards US founders typically use.
Team building
Beyond individual hires
Pakistan offers talent across multiple business functions, making it possible to build dedicated teams rather than rely on isolated hires. With the right structure, these teams can grow with the business, supported by consistent processes and local leadership.
Talent arbitrage
Retention advantage
Pakistan offers SMEs access to a deep talent market where competitive compensation can go further. By paying above local market rates, businesses can attract experienced professionals and build stable teams.
Talent pool
A deeper pool of talent
Pakistan has a large pool of technical and business professionals across software engineering, QA, data, design, finance, accounting, and customer support. The opportunity lies in accessing candidates who aren't necessarily visible on the job boards US founders typically use.
Team building
Beyond individual hires
Pakistan offers talent across multiple business functions, making it possible to build dedicated teams rather than rely on isolated hires. With the right structure, these teams can grow with the business, supported by consistent processes and local leadership.
Talent arbitrage
Retention advantage
Pakistan offers SMEs access to a deep talent market where competitive compensation can go further. By paying above local market rates, businesses can attract experienced professionals and build stable teams.
Choose the right hiring arrangement
You have three realistic routes. Each one decides who the legal employer is, who carries compliance risk, and how hard it is to change course later.
Key factors
EOR
Local entity
Contractor
Legal employer
EOR
Your Pakistani entity
No employment relationship
Setup
Locally compliant employment contract
Your entity issues employment contract
Independent services agreement
Payroll
EOR manages payroll and withholding
You manage payroll and withholding
Contractor manages own taxes
Compliance
EOR manages employer obligations
You manage all local obligations
Classification risks if misclassified
Benefits and leave
EOR administers statutory benefits
You administer benefits and leave
Generally not applicable
Administration
EOR handles ongoing employment administration
Your team handles ongoing administration
You manage contractual deliverables
Termination
EOR coordinates locally compliant termination
Your entity manages termination requirements
Governed by services agreement
Key factors
EOR
Local entity
Contractor
Legal employer
EOR
Your Pakistani entity
No employment relationship
Setup
Locally compliant employment contract
Your entity issues employment contract
Independent services agreement
Payroll
EOR manages payroll and withholding
You manage payroll and withholding
Contractor manages own taxes
Compliance
EOR manages employer obligations
You manage all local obligations
Classification risks if misclassified
Benefits and leave
EOR administers statutory benefits
You administer benefits and leave
Generally not applicable
Administration
EOR handles ongoing employment administration
Your team handles ongoing administration
You manage contractual deliverables
Termination
EOR coordinates locally compliant termination
Your entity manages termination requirements
Governed by services agreement
Key factors
EOR
Local entity
Contractor
Legal employer
EOR
Your Pakistani entity
No employment relationship
Setup
Locally compliant employment contract
Your entity issues employment contract
Independent services agreement
Payroll
EOR manages payroll and withholding
You manage payroll and withholding
Contractor manages own taxes
Compliance
EOR manages employer obligations
You manage all local obligations
Classification risks if misclassified
Benefits and leave
EOR administers statutory benefits
You administer benefits and leave
Generally not applicable
Administration
EOR handles ongoing employment administration
Your team handles ongoing administration
You manage contractual deliverables
Termination
EOR coordinates locally compliant termination
Your entity manages termination requirements
Governed by services agreement
The misclassification risk
Calling someone a contractor doesn’t make them one. If a person works set hours, takes direction like an employee, uses your tools, works only for you and has no real ability to send a substitute or decline work, a regulator or court may look past the label.
The misclassification risk
Calling someone a contractor doesn’t make them one. If a person works set hours, takes direction like an employee, uses your tools, works only for you and has no real ability to send a substitute or decline work, a regulator or court may look past the label.
The misclassification risk
Calling someone a contractor doesn’t make them one. If a person works set hours, takes direction like an employee, uses your tools, works only for you and has no real ability to send a substitute or decline work, a regulator or court may look past the label.
Choose an EOR if
You want to move fast and you're a growing company.
Choose a local entity if
You want long-term local presence.
Choose a contractor if
The work is independent and project-based.
Choose an EOR if
You want to move fast and you're a growing company.
Choose a local entity if
You want long-term local presence.
Choose a contractor if
The work is independent and project-based.
Choose an EOR if
You want to move fast and you're a growing company.
Choose a local entity if
You want long-term local presence.
Choose a contractor if
The work is independent and project-based.
The Hiring Fit Matrix: Where does your role sit?
Every role sits somewhere in this grid. Knowing where tells you how to set up the hire, not whether to make it.
HIGH STRUCTURE • LOW CONTEXT LOAD
The Plug-In
Clear deliverables, written knowledge, little need for US overlap. Offshore works from day one.
Next step: start here, with one named outcome and a person to check in with weekly
HIGH STRUCTURE • HIGH CONTEXT LOAD
The Bridge
Well-run work that still leans on US market knowledge or live input. It works with the right setup.
Next step: set overlap hours and name a person as the context owner
LOW STRUCTURE • LOW CONTEXT LOAD
The Blueprint
The work doesn’t need much US context, but it isn’t written down yet. The role can’t carry that gap alone.
Next step: document the process and name a manager before you hire
LOW STRUCTURE • HIGH CONTEXT LOAD
The Anchor
Live input, US context, and knowledge that sits in people’s heads. Hard to hand off right now.
Next step: keep it close until you can document it, then revisit
HIGH STRUCTURE • LOW CONTEXT LOAD
The Plug-In
Clear deliverables, written knowledge, little need for US overlap. Offshore works from day one.
Next step: start here, with one named outcome and a person to check in with weekly
HIGH STRUCTURE • HIGH CONTEXT LOAD
The Bridge
Well-run work that still leans on US market knowledge or live input. It works with the right setup.
Next step: set overlap hours and name a person as the context owner
LOW STRUCTURE • LOW CONTEXT LOAD
The Blueprint
The work doesn’t need much US context, but it isn’t written down yet. The role can’t carry that gap alone.
Next step: document the process and name a manager before you hire
LOW STRUCTURE • HIGH CONTEXT LOAD
The Anchor
Live input, US context, and knowledge that sits in people’s heads. Hard to hand off right now.
Next step: keep it close until you can document it, then revisit
HIGH STRUCTURE • LOW CONTEXT LOAD
The Plug-In
Clear deliverables, written knowledge, little need for US overlap. Offshore works from day one.
Next step: start here, with one named outcome and a person to check in with weekly
HIGH STRUCTURE • HIGH CONTEXT LOAD
The Bridge
Well-run work that still leans on US market knowledge or live input. It works with the right setup.
Next step: set overlap hours and name a person as the context owner
LOW STRUCTURE • LOW CONTEXT LOAD
The Blueprint
The work doesn’t need much US context, but it isn’t written down yet. The role can’t carry that gap alone.
Next step: document the process and name a manager before you hire
LOW STRUCTURE • HIGH CONTEXT LOAD
The Anchor
Live input, US context, and knowledge that sits in people’s heads. Hard to hand off right now.
Next step: keep it close until you can document it, then revisit
Junior versus senior hires
A common pattern for first-time teams is to hire one senior person who can run the work locally, then add junior or mid-level people around them.
Junior
Require structured onboarding and mentorship
Need clear playbooks and guidance
Require a defined first-90-days plan
Demand more hands-on management
Senior
Bring greater autonomy and judgment
Shorten onboarding and ramp-up time
Value growth, ownership, and stability
Expect competitive compensation and opportunities
Junior
Require structured onboarding and mentorship
Need clear playbooks and guidance
Require a defined first-90-days plan
Demand more hands-on management
Senior
Bring greater autonomy and judgment
Shorten onboarding and ramp-up time
Value growth, ownership, and stability
Expect competitive compensation and opportunities
Junior
Require structured onboarding and mentorship
Need clear playbooks and guidance
Require a defined first-90-days plan
Demand more hands-on management
Senior
Bring greater autonomy and judgment
Shorten onboarding and ramp-up time
Value growth, ownership, and stability
Expect competitive compensation and opportunities
Minimum wage and salary benchmarks
Minimum wage is rarely used as a benchmark for professional job roles. Instead, it serves as a legally mandated baseline and employer-funded benefits, like the Employees' Old-Age Benefits Institution (EOBI) pension and Employees' Social Security Institute (ESSI) medical coverage, are calculated directly as a percentage of the minimum wage.
PKR 0
Federal monthly minimum wage (unskilled), as of November 2026
PKR 0
Federal monthly minimum wage (unskilled), as of November 2026
PKR 0
Federal monthly minimum wage (unskilled), as of November 2026
Our guide on Salary Benchmarks
Salary benchmarks, true cost and retention rules to keep top offshore talent in 2026.
The legal floor is mostly relevant for lower-wage roles. If you’re hiring a developer, the minimum wage is irrelevant to your offer. What matters is competing with local employers and other international teams.
Legal minimum is not market pay
The legal floor is mostly relevant for lower-wage roles. If you’re hiring a developer, the minimum wage is irrelevant to your offer. What matters is competing with local employers and other international teams.
Legal minimum is not market pay
The legal floor is mostly relevant for lower-wage roles. If you’re hiring a developer, the minimum wage is irrelevant to your offer. What matters is competing with local employers and other international teams.
Statutory benefits and payroll obligations
What applies depends on the worker’s employment status, the employing establishment, province or ICT, sector, and number of workers. The main categories are below.
EOBI
The Employees’ Old-Age Benefits Institution (EOBI) provides old-age, invalidity and survivor benefits to insured workers. Where the EOB Act applies, the employer contributes 5% and the employee 1% of the worker’s minimum wages, 6% in total each month.
Key points
Generally covers establishments with five or more employees.
Contributions apply to the prescribed minimum-wage base.
Employers register, maintain records, file returns, and remit contributions.
Employers cannot deduct their 5% contribution from wages.
Key points
Generally covers establishments with five or more employees.
Contributions apply to the prescribed minimum-wage base.
Employers register, maintain records, file returns, and remit contributions.
Employers cannot deduct their 5% contribution from wages.
Key points
Generally covers establishments with five or more employees.
Contributions apply to the prescribed minimum-wage base.
Employers register, maintain records, file returns, and remit contributions.
Employers cannot deduct their 5% contribution from wages.
0%
of applicable minimum wages, paid by employer
0%
of applicable minimum wages, paid by employee
0%
of applicable minimum wages, paid by employer
0%
of applicable minimum wages, paid by employee
0%
of applicable minimum wages, paid by employer
0%
of applicable minimum wages, paid by employee
Social security
Provincial social security institutions, such as PESSI in Punjab and SESSI in Sindh, may require employer registration and contributions, typically for workers under a wage threshold. Whether this applies to a salaried professional depends on the threshold, province, and establishment. Ask your payroll provider to confirm.
Income-tax withholding
Employers generally withhold income tax from salaried employees’ pay and remit it to the tax authority. This is deducted from the employee’s gross salary, not added on top, unless you’ve agreed a gross-up. Rates, slabs and exemptions change often. Use your payroll provider for the current rules.
Annual taxable salary (PKR)
Tax rate
Up to 600,000
0%
600,001 – 1,200,000
1% of the amount exceeding 600,000
1,200,001 – 2,200,000
Rs. 6,000 + 11% of the amount exceeding 1,200,000
2,200,001 – 3,200,000
Rs. 116,000 + 20% of the amount exceeding 2,200,000
3,200,001 – 4,100,000
Rs. 316,000 + 25% of the amount exceeding 3,200,000
4,100,001 – 5,600,000
Rs. 541,000 + 29% of the amount exceeding 4,100,000
5,600,001 – 7,000,000
Rs. 976,000 + 32% of the amount exceeding 5,600,000
Above 7,000,000
Rs. 1,424,000 + 35% of the amount exceeding 7,000,000
Annual taxable salary (PKR)
Tax rate
Up to 600,000
0%
600,001 – 1,200,000
1% of the amount exceeding 600,000
1,200,001 – 2,200,000
Rs. 6,000 + 11% of the amount exceeding 1,200,000
2,200,001 – 3,200,000
Rs. 116,000 + 20% of the amount exceeding 2,200,000
3,200,001 – 4,100,000
Rs. 316,000 + 25% of the amount exceeding 3,200,000
4,100,001 – 5,600,000
Rs. 541,000 + 29% of the amount exceeding 4,100,000
5,600,001 – 7,000,000
Rs. 976,000 + 32% of the amount exceeding 5,600,000
Above 7,000,000
Rs. 1,424,000 + 35% of the amount exceeding 7,000,000
Annual taxable salary (PKR)
Tax rate
Up to 600,000
0%
600,001 – 1,200,000
1% of the amount exceeding 600,000
1,200,001 – 2,200,000
Rs. 6,000 + 11% of the amount exceeding 1,200,000
2,200,001 – 3,200,000
Rs. 116,000 + 20% of the amount exceeding 2,200,000
3,200,001 – 4,100,000
Rs. 316,000 + 25% of the amount exceeding 3,200,000
4,100,001 – 5,600,000
Rs. 541,000 + 29% of the amount exceeding 4,100,000
5,600,001 – 7,000,000
Rs. 976,000 + 32% of the amount exceeding 5,600,000
Above 7,000,000
Rs. 1,424,000 + 35% of the amount exceeding 7,000,000
Notice, termination and final-settlement protections.
The exact entitlement depends on the applicable provincial or federal law, the type of establishment, and the employee’s role.
Contractual benefits
These are not automatically statutory. They depend on the offer letter, employment contract, or company policy:
Health insurance or medical allowance.
Conveyance, housing, internet, or mobile allowance.
Festival, annual, or performance bonus.
Gratuity or end-of-service benefit, where applicable by law, scheme, or contract.
Equipment, software, and remote-work support.
Entitlement
Details
Statutory working hours
Standard workweek is up to 48 hours, though many employers operate on 40 hours.
Paid public holidays
Employees receive paid leave on government-declared public holidays.
Maternity leave
Up to 180 days of paid maternity leave for the first child under applicable laws.
Sick leave
Paid sick leave is provided according to provincial labor laws.
Casual leave
Casual leave entitlement varies by province and employer policy.
Overtime compensation
Overtime is generally paid at 2× the employee's regular wage.
EOBI benefits
Eligible employers must make mandatory EOBI retirement contributions.
Employment contracts
Written employment contracts are required under applicable labor laws.
Probation period
The standard probation period is 3 months unless otherwise agreed.
Notice period
Employees typically receive 30 days' notice or pay in lieu after confirmation.
Entitlement
Details
Statutory working hours
Standard workweek is up to 48 hours, though many employers operate on 40 hours.
Paid public holidays
Employees receive paid leave on government-declared public holidays.
Maternity leave
Up to 180 days of paid maternity leave for the first child under applicable laws.
Sick leave
Paid sick leave is provided according to provincial labor laws.
Casual leave
Casual leave entitlement varies by province and employer policy.
Overtime compensation
Overtime is generally paid at 2× the employee's regular wage.
EOBI benefits
Eligible employers must make mandatory EOBI retirement contributions.
Employment contracts
Written employment contracts are required under applicable labor laws.
Probation period
The standard probation period is 3 months unless otherwise agreed.
Notice period
Employees typically receive 30 days' notice or pay in lieu after confirmation.
Entitlement
Details
Statutory working hours
Standard workweek is up to 48 hours, though many employers operate on 40 hours.
Paid public holidays
Employees receive paid leave on government-declared public holidays.
Maternity leave
Up to 180 days of paid maternity leave for the first child under applicable laws.
Sick leave
Paid sick leave is provided according to provincial labor laws.
Casual leave
Casual leave entitlement varies by province and employer policy.
Overtime compensation
Overtime is generally paid at 2× the employee's regular wage.
EOBI benefits
Eligible employers must make mandatory EOBI retirement contributions.
Employment contracts
Written employment contracts are required under applicable labor laws.
Probation period
The standard probation period is 3 months unless otherwise agreed.
Notice period
Employees typically receive 30 days' notice or pay in lieu after confirmation.
Public holidays
Pakistan has fixed national holidays (such as 14 August and 25 December) and Islamic holidays that move with the lunar calendar, like Eid ul Fitr and Eid ul Adha. Moon sighting can shift dates by a day and the government announces closures close to the date. Plan around that. Tell your US team that Eid periods often mean several days off and that availability can change on short notice.
Working hours, overtime, probation and workplace policies
Contract terms matter here, and so does legal review. Rules vary by establishment type and location. Use this section as a drafting checklist, not a legal standard.
Policy
What to decide
Working hours
48 hours/week, core overlap hours, flexibility
Overtime
2x the ordinary pay rate. 3x on public holidays. Whether applicable or not.
Confidentiality
NDA scope, duration after exit
Intellectual property
Assignment of work product, with wording reviewed locally
Notice and resignation
Notice periods for each side, in writing
Termination
Grounds, process, documentation
Final settlement
Paid at exit: salary, leave encashment where applicable, other dues, timing
Policy
What to decide
Working hours
48 hours/week, core overlap hours, flexibility
Overtime
2x the ordinary pay rate. 3x on public holidays. Whether applicable or not.
Confidentiality
NDA scope, duration after exit
Intellectual property
Assignment of work product, with wording reviewed locally
Notice and resignation
Notice periods for each side, in writing
Termination
Grounds, process, documentation
Final settlement
Paid at exit: salary, leave encashment where applicable, other dues, timing
Policy
What to decide
Working hours
48 hours/week, core overlap hours, flexibility
Overtime
2x the ordinary pay rate. 3x on public holidays. Whether applicable or not.
Confidentiality
NDA scope, duration after exit
Intellectual property
Assignment of work product, with wording reviewed locally
Notice and resignation
Notice periods for each side, in writing
Termination
Grounds, process, documentation
Final settlement
Paid at exit: salary, leave encashment where applicable, other dues, timing
Common things we have seen founders ignore
Power and Internet
Power outage and connectivity can affect remote work. Ask whether the employee has backup and consider covering part of it.
Cultural calendar
Ramadan typically changes working patterns. Agree expectations early instead of discovering mid-way.
Termination process
Pakistani law and standing orders can impose procedural requirements, so consult a legal advisor or an EOR before you act.
Power and Internet
Power outage and connectivity can affect remote work. Ask whether the employee has backup and consider covering part of it.
Cultural calendar
Ramadan typically changes working patterns. Agree expectations early instead of discovering mid-way.
Termination process
Pakistani law and standing orders can impose procedural requirements, so consult a legal advisor or an EOR before you act.
Power and Internet
Power outage and connectivity can affect remote work. Ask whether the employee has backup and consider covering part of it.
Cultural calendar
Ramadan typically changes working patterns. Agree expectations early instead of discovering mid-way.
Termination process
Pakistani law and standing orders can impose procedural requirements, so consult a legal advisor or an EOR before you act.
Benefits, leave, and any bonuses, communicated as the contract will state them
Notice that the offer is subject to documentation and background or reference checks, if that’s your process
Clearly communicating expectations, terms, and policies upfront keeps both parties on the same page.
Employment contract essentials
Scope of work
Role, duties, probation and working terms
Payment terms
Comp, tax, deductions, appraisals.
Leave policy
Annual, medical leaves and holidays.
Termination terms
Notice period and final settlements.
Confidentiality
IP assignment and restrictive covenants.
Scope of work
Role, duties, probation and working terms
Payment terms
Comp, tax, deductions, appraisals.
Leave policy
Annual, medical leaves and holidays.
Termination terms
Notice period and final settlements.
Confidentiality
IP assignment and restrictive covenants.
Scope of work
Role, duties, probation and working terms
Payment terms
Comp, tax, deductions, appraisals.
Leave policy
Annual, medical leaves and holidays.
Termination terms
Notice period and final settlements.
Confidentiality
IP assignment and restrictive covenants.
Compliance documentation
Collect identification and tax documents, bank details for payroll, education and employment records, and any registration details needed for statutory enrollment. Your payroll provider or EOR will tell you exactly what they need.
Payroll and benefits enrollment
Make sure the employee is enrolled in payroll, and in EOBI or other statutory schemes where applicable, before the first pay date. If you offer health insurance or other benefits, confirm when coverage starts.
Equipment, access and workspace
Decide who supplies the laptop and tools, and who owns them. Set up accounts and security (password manager, MFA, device policy) before day one. Ask where the person will work. If home isn’t ideal, a coworking space may help.
Managing a Pakistan-based remote employee
Hiring is the start. Whether the person stays, grows and produces depends on how you manage them.
Overlap hours and async communication
Agree on one overlap block, say two to three hours that work for both sides and protect it for meetings, questions and handoffs. Everything else should work async: written updates, recorded walkthroughs, clear ticket descriptions and decisions documented where the team can find them. Tools help and our roundup of remote-team tools covers common options.
Performance Management
Set clear goals, provide regular feedback, and address issues early.
Equipment and Workspace
Establish clear policies for equipment, repairs, and remote work needs.
Engagement and Retention
Keep employees involved, supported, and motivated to grow.
Employee Development
Provide growth opportunities and regular performance reviews.
Offboarding
Define exit procedures, handovers, and final settlement requirements.
Performance Management
Set clear goals, provide regular feedback, and address issues early.
Equipment and Workspace
Establish clear policies for equipment, repairs, and remote work needs.
Engagement and Retention
Keep employees involved, supported, and motivated to grow.
Employee Development
Provide growth opportunities and regular performance reviews.
Offboarding
Define exit procedures, handovers, and final settlement requirements.
Performance Management
Set clear goals, provide regular feedback, and address issues early.
Equipment and Workspace
Establish clear policies for equipment, repairs, and remote work needs.
Engagement and Retention
Keep employees involved, supported, and motivated to grow.
Employee Development
Provide growth opportunities and regular performance reviews.
Offboarding
Define exit procedures, handovers, and final settlement requirements.
How It Works shows how East Consulting supports teams after the hire and the industry insights has more on managing distributed teams.
Which roles should you hire in Pakistan?
Most functions work. What matters is whether the role fits a distributed, time-shifted setup. For detailed look on roles click on "Roles we place" at the top.
