Employer of Record (EOR) Services  in Pakistan: Hire & Expand Globally

An Employer of Record (EOR) is a local organization that becomes the legal employer for your workforce in Pakistan, allowing foreign companies to build teams without setting up a local entity. The EOR issues compliant employment contracts, runs monthly payroll, withholds and remits income tax, manages social security registrations, and applies Pakistan labor law consistently across provinces.​ You keep control over day-to-day work, targets, and performance, while the EOR handles statutory filings, regulatory reporting, and employment records. This structure is often used by companies that want to access talent in cities like Karachi, Lahore, and Islamabad quickly, test the Pakistan market before investing in a subsidiary, or centralize risk around one expert local employer instead of managing compliance in-house.​

Companies use EOR services to access Pakistan's skilled workforce, particularly in technology, engineering, customer support, and financial services, without the 6-12 month entity registration process or the ongoing costs of maintaining local corporate infrastructure. Pakistan offers competitive salary rates that are 40-60% lower than Western markets, a growing talent pool of English-speaking professionals from top universities, and a favorable time zone for serving global clients across Asia, Europe, and the Middle East.

You do not need to establish a local legal entity when using an EOR services in Pakistan. The EOR uses its own registered company to act as the legal employer, so you can engage team members without incorporating a subsidiary, registering for tax, or opening local bank accounts. This removes months of entity setup work and converts it into a streamlined onboarding process measured in days. Beyond speed, this structure also shifts the burden of ongoing corporate and employment compliance, such as registrations, statutory updates, and local documentation, onto the EOR instead of your internal team.

The EOR registers employees with EOBI and provincial social security institutions, calculates monthly employer and employee contributions based on minimum wage thresholds, and submits payments to regulatory authorities on schedule. For tax compliance, the EOR withholds income tax from employee salaries according to FBR tax slabs, files monthly withholding statements, issues annual salary certificates, and maintains documentation for audits. The EOR also tracks changes to contribution rates, tax brackets, and filing deadlines to ensure continuous compliance.

You generally cannot use an EOR to engage true independent contractors in Pakistan. EOR services are built for regular employees, where the provider becomes the legal employer and runs payroll, tax, and statutory benefits. If the working relationship fits contractor status (project-based, high autonomy, own tools, multiple clients), it is better handled through a separate contractor agreement or contractor payment solution. Where many companies run into problems is classifying long-term, full‑time workers as contractors when they function like employees; in those cases, moving them onto an EOR employment model helps reduce misclassification risk and ensures proper tax handling, social security coverage, and statutory entitlements.

EOR pricing in Pakistan typically follows a monthly fee structure based on the number of employees and their salary levels. Costs generally include employment contract management, payroll processing, tax filings, social security contributions, benefits administration, and ongoing HR support. Pricing models vary by provider, some charge a flat monthly fee per employee, while others use a percentage of gross salary. Total costs are typically lower than establishing and maintaining a local entity, especially for teams of fewer than 10 employees.

EOR services in Pakistan typically include statutory benefits required by law: paid annual leave (minimum 14 days), sick leave, public holidays, EOBI pension contributions, social security coverage, and gratuity calculations for end-of-service. Many EORs also facilitate additional benefits such as health insurance, provident fund contributions, performance bonuses, and transportation or meal allowances based on your company's compensation policy.

Termination is managed through the EOR in line with Pakistan labor law. The provider handles notice period calculations, final settlements, gratuity where applicable, leave encashment, and documentation of the reasons for ending employment. You decide when and why to end the employment based on performance, role changes, or business needs, while the EOR executes the process according to legal requirements and manages any required consultation, severance calculations, and final payroll so the exit is documented correctly and the risk of wrongful termination claims is reduced.​

When you establish your own Pakistan entity, the EOR can facilitate employee transfer through a formal transition process. This typically involves terminating employment with the EOR (with proper notice and settlements) and immediately rehiring employees under your new entity. Alternatively, some transitions use business transfer provisions that protect employee rights and service continuity. The EOR assists with final payroll reconciliation, benefits settlement, documentation transfer, and coordination of the changeover to minimize disruption.