PESSI on the payslip: what Punjab employers record

StreamHCM

Written by the StreamHCM team for HR and payroll managers in Pakistan. Updated on 31 October 2026.

Payroll clerks in Punjab often put every statutory line in one cell called “deductions”. That hides the thing a PESSI inspector will ask for, and it also hides a mistake: PESSI, in the standard scheme, is not the employee’s money.

This note is the payslip view of the longer PESSI contribution guide. Rates change by notification. Treat the figures below as the ones this site is using from the texts checked in October 2026, and confirm them before you file.

Three lines that are not interchangeable

A covered employee in Lahore can create three different amounts in one month.

• FBR salary tax, withheld from the employee under Section 149. It is the employee’s tax. It belongs on the payslip as tax.
• EOBI, a federal scheme. The employee share is 1% and the employer share is 5% of the notified wage base, not of gross salary. From EOBI’s 2026-27 circular this site uses a base of Rs. 40,700, which is Rs. 407 and Rs. 2,035. The employee share is a real deduction. The employer share is a cost. See the EOBI guide and the EOBI calculator.
• PESSI, the Punjab Employees Social Security Institution. The employer contributes 6% of wages for covered workers and may not recover that 6% from the employee. A Punjab notification of February 2026 fixed the monthly wage ceiling for contribution at Rs. 40,000, so the contribution does not keep rising with gross pay above that ceiling.

Put the employer PESSI amount on the payroll register as a cost. Do not subtract it from net pay. If you are in PESSI’s self-assessment scheme, read the current terms: that scheme can include a small fixed employee share, and that share is the only PESSI figure that belongs as a deduction.

Why spreadsheets mix them up

EOBI has an employee percentage, so people copy the pattern onto PESSI. The institutions are different, the forms are different, and the wage bases are different. EOBI’s base in the circular above is Rs. 40,700. The PESSI ceiling cited here is Rs. 40,000. Using one number for both will be wrong even when both schemes apply to the same worker.

A second error is geographic. A group with a mill in Faisalabad and an office in Karachi cannot use Punjab’s rule for everyone. Sindh’s institution is SESSI, covered in the SESSI guide. The clean setup attaches the contribution to the branch.

What to look for in payroll software

Open a covered employee in Lahore and read the register, not the brochure.

• PESSI is an employer cost at the rate and ceiling you set, with an effective date so June and July can differ.
• The employee’s net pay falls by tax and by the EOBI employee share, and not by the employer’s PESSI.
• A Sindh branch on the same company uses SESSI instead, in the same pay run.
• The payslip names each line. A blended “statutory” deduction is how an over-deduction survives until someone complains. The sample layout is the salary slip format.

Payroll software in Pakistan should keep these as settings. StreamHCM does that so a new notification is an update, not a rebuilt workbook. The arithmetic for a single month of EOBI is public on the calculator. PESSI still needs your coverage decision: not every employee is a secured worker, and this page does not decide that for you.

Questions