Payroll Software Pakistan ÔÇö A Complete EOBI, PESSI & Tax Guide

Payroll in Pakistan is more complicated than "salary minus deductions." EOBI contributions, PESSI deductions, withholding income tax slabs, and biometric attendance integration all have to come together correctly every single month ÔÇö and getting any one of them wrong creates compliance risk, not just an unhappy employee. This guide covers what Pakistani payroll actually requires and how software should handle it.

EOBI: What Employers Actually Owe

The Employees' Old-Age Benefits Institution (EOBI) requires contributions for employees earning within the scheme's wage threshold. The structure businesses need software to track correctly:

• Employee contribution ÔÇö a fixed monthly amount deducted from the employee's pay.
• Employer contribution ÔÇö a percentage of the minimum wage, paid by the employer on top of salary (not deducted from it).
• Monthly filing ÔÇö contributions must be deposited and reported on time; manual tracking across dozens of employees is where errors creep in.

Payroll software should calculate both shares automatically per employee and generate the monthly contribution report ready for filing ÔÇö not leave you to calculate percentages by hand every month.

PESSI/SESSI: Provincial Social Security

Punjab Employees Social Security Institution (PESSI) ÔÇö called SESSI in Sindh ÔÇö is a separate provincial social security contribution, distinct from EOBI. Many Pakistani businesses conflate the two or miss one entirely because they're tracked manually. Software should handle both as independent, correctly-calculated line items per employee, since the applicable scheme depends on the province the business operates in.

Withholding Income Tax on Salaries

Income tax withholding on salaries follows FBR's progressive tax slabs, which change periodically. Manually recalculating tax for every employee, every time slabs update, is both slow and a common source of underpayment or overpayment errors. Good payroll software should:

• Apply the correct slab automatically based on annual salary projection
• Recalculate cleanly when an employee's salary changes mid-year
• Generate the annual tax certificate data employees need for their own filing

Biometric Attendance ÔÇö Where Most Manual Payroll Breaks Down

Attendance is usually the messiest part of Pakistani payroll: late arrivals, half-days, overtime, and leave all need to flow into the salary calculation correctly. Payroll software that integrates directly with common biometric machines (ZKTeco, Suprema, Anviz) eliminates the manual step of someone transcribing attendance data into a spreadsheet before running payroll ÔÇö which is both slow and a common source of disputes with employees over recorded hours.

What a Proper Payroll Run Should Produce

What Payroll Software Costs in Pakistan

Standalone payroll software starts from PKR 80,000 for a business with structured salaries and up to a few dozen employees. Combined with HR, attendance, or accounting integration, costs range from PKR 120,000 to 250,000. There's no hard employee-count ceiling ÔÇö we've built payroll systems for businesses from 15 to 300+ employees; the cost scales with complexity (multiple departments, job grades, and pay structures), not headcount alone.

Frequently Asked Questions

What happens if EOBI or PESSI rates change?

Custom-built payroll software should be updated by your developer whenever regulatory rates change ÔÇö this is normally covered under an annual maintenance agreement rather than requiring you to track rate changes yourself.

Can payroll software handle employees on different salary structures in the same company?

Yes ÔÇö a properly built system supports multiple departments, job grades, and pay structures (fixed salary, daily wage, commission-based) within a single company, calculating each correctly according to its own rules.

Is manual payroll (Excel) actually risky, or just slow?

Both. Beyond the time cost, manual EOBI/PESSI/tax calculations are a common source of underpayment that surfaces during an audit or inspection ÔÇö by which point correcting months of errors is far more work than getting it right the first time.

If your business is still running payroll manually or on a system that doesn't handle EOBI, PESSI, and withholding tax correctly, book a free consultation ÔÇö we'll review your current process and tell you honestly whether custom payroll software is worth it at your size.