How EOBI is deducted on a Pakistani payslip

Most Excel payroll files treat EOBI like a tip: take 1% of whatever the employee earned this month and move on. That is not how the Employees' Old-Age Benefits Institution works. Covered staff pay 1% and the employer pays 5%, usually on a notified minimum wage, not on full gross. For 2026-27 the federal figure teams keep quoting is Rs. 40,700. Confirm the latest notification before you run a live cycle. A sheet that takes 1% of a Rs. 180,000 salary is over-deducting every month.

This is one of the five checks on our best HR software in Pakistan page. If a vendor cannot show the wage base as a setting, they are guessing.

The wage base, not the salary

EOBI is a social-security contribution. The rate sits on a statutory floor. An officer on Rs. 250,000 and a cutter on the notified minimum can both be assessed on that same floor, unless your industry notice says otherwise. Apply the percentage to gross and two things happen: the employee loses more than the law asks, and your books no longer match what EOBI expects at filing time.

The employee line on the payslip should read as 1% of the wage base. The employer 5% is a company cost. It should not be buried inside “other deductions” with no label.

Who is covered

Coverage follows the EOBI Act and later notifications, not a feeling that “permanent staff only” are in. If someone is on your books as an employee and meets the institution's tests, they belong in the contribution file. Contract labels that HR invented to skip EOBI do not survive a visit. Build the rule once, attach it to the employee type, and stop deciding person by person on payday.

What the payslip has to show

Employees argue about net pay. They calm down when the slip names the deduction. Show: wage base used, employee 1%, employer 5% as a note if you print it, and the month. A single “statutory” lump that mixes EOBI, tax and a loan is how disputes start.

The same numbers have to match the monthly EOBI return. If payroll says one figure and the PR form says another, someone typed a row by hand.

Where spreadsheets fail

Three patterns show up in almost every file we see. The percentage is wired to gross. The wage base was last edited two budgets ago. New joiners in week three of the month are either skipped or charged a full month because the formula has no joining date. None of those are hard in software. They are hard when the rule lives in one person's head.

The deductions calculator on this site uses the same idea: name the wage base, then apply the rate. Use it to check one employee. Do not use it as the payroll run.

What to ask a vendor

Ask to see the EOBI policy screen, not a slide. You want a wage-base field you can change when the notification moves, a 1% / 5% split, and a report that lists every covered employee for the month. If the answer is “we put it in other deductions,” keep looking. That is also how you judge the rest of Pakistani payroll: tax, EOBI and attendance have to land on one slip.

What StreamHCM does with this

StreamHCM stores EOBI as a payroll policy, not a cell. The wage base is a setting. When the floor changes, you update it once. The next run uses it for every covered employee. That is the bar. It is not a #1 badge. It is the difference between a contribution file and a guess.