What is EOBI?

Who has to register

Registration follows headcount. Since 1 July 2008, an industrial or commercial establishment with five or more employees has to register with EOBI, and one with fewer may join voluntarily. Once the establishment is registered, the institution records each insured person and issues them a registration card.

Insured workers become entitled to the benefits the scheme pays: an old-age pension on retirement and an invalidity pension among them. Because the employer registers and pays, a business that grows past four employees should check its EOBI position as soon as the fifth person joins, not at the next budget.

How the contribution is worked out

Unlike income tax, EOBI is not a percentage of what each person earns. The Act defines “wages” as the rates declared under the Minimum Wages for Unskilled Workers Ordinance, 1969, and the contribution is a share of that figure: the employer pays 5% of the minimum wage and the employee 1%, for every insured person, every month.

The consequence is easy to miss. A junior clerk and a senior engineer cost the business the same in EOBI, and a raise changes nothing. What changes the amount is a new minimum-wage notification, so the base has to be checked whenever one is issued — confirm the current figure with EOBI before a run that depends on it. The Pakistan payroll guide sets EOBI beside income tax and provincial social security.

How Ledgr handles EOBI

In Ledgr, the payroll tool in Orbiz, EOBI is a statutory scheme: a percentage for the employee and one for the employer, charged on a base that can have a floor and a cap. Setting both the floor and the cap to the minimum wage charges every insured person on that one figure, whatever they earn, which is how the Act works. The scheme keeps its own ledger and returns, so the monthly figure for each person is on record when EOBI asks for it.