EOBI White Paper
Complete Guide to Employees' Old-Age Benefits Institution
Prepared for P@SHA Members | April 2026
Executive Summary
EOBI is Pakistan's mandatory federal pension scheme under the EOBI Act, 1976. Applies to establishments with 10+ employees nationwide. Contribution rate: 6% of wages (5% employer + 1% employee) on a wage base ceiling of Rs. 25,000/month. Provides old-age pension, survivors' pension, invalidity pension, and old-age grant.
1. What is EOBI?
The Employees' Old-Age Benefits Institution (EOBI) is a federal autonomous body established under the EOBI Act, 1976. It provides social security benefits to workers in the private sector.
Administration
- Ministry: Human Resource Development
- Headquarters: Islamabad
- Regional offices across Pakistan
- Website: eobi.gov.pk
- Phone: 051-9214481
- UAN: 111-22-262
Coverage
- ~8 million+ registered workers
- ~120,000+ registered establishments
- All provinces & territories
- Private sector (excluding govt employees covered by GP Fund)
2. Who Must Register?
| Criterion | Requirement | Notes |
|---|---|---|
| Employee Count | 10 or more | Headcount, not full-time equivalent |
| Sector | Private sector | IT/ITeS, manufacturing, services — all included |
| Location | Anywhere in Pakistan | Federal law applies nationwide |
| Salary Coverage | Employees earning ≤ Rs. 25,000/month | Higher-paid employees are exempt from contributions |
| Exclusions | Govt employees, forces, autonomous bodies with own pension | GP Fund-covered employees |
[Source: EOBI Act, 1976, Section 2; eobi.gov.pk]
💡 IT Company Example
A Karachi-based IT company with 15 employees — 3 earning Rs. 20,000, 12 earning Rs. 150,000+. Only the 3 employees earning ≤ 25,000 need EOBI contributions. Monthly cost: 6% × 25,000 × 3 = Rs. 4,500/month.
3. Contribution Structure
| Contributor | Rate | Base (ceiling) | Max Monthly |
|---|---|---|---|
| Employer | 5% | Rs. 25,000 | Rs. 1,250 |
| Employee | 1% | Rs. 25,000 | Rs. 250 |
| Total | 6% | Rs. 25,000 | Rs. 1,500 |
Contribution Timelines
- Due date: 15th of following month
- Penalty for late: Per EOBI regulations
- Payment mode: Bank draft, online transfer, or EOBI designated banks
- Registration: Within 30 days of reaching 10-employee threshold
4. Benefits Provided
| Benefit | Eligibility | Amount |
|---|---|---|
| Old-Age Pension | Age 60 (men) / 55 (women), 15+ years contributions | Min Rs. 8,500/month (as of 2026, varies with wage history) |
| Old-Age Pension (Early) | Age 55+ with 25+ years contributions | Reduced rate (2% per year early) |
| Survivors' Pension | Dependents of deceased insured person with 36+ contributions | 60% of pension (widow); children up to age 21 |
| Invalidity Pension | Permanent disability, 15+ contributions | Based on wage history |
| Old-Age Grant | Insufficient contributions for pension | Lump sum of total contributions + interest |
[Source: EOBI Act 1976, Sections 12-28; eobi.gov.pk]
5. Pension Calculation
Pension Formula:
Monthly Pension = (Insurable Wages × Pension Factor × No. of Contribution Years) ÷ 50
Where Insurable Wages = average wages in last 60 months (capped at Rs. 25,000)
Example: IT Support Staff
Employee earned Rs. 20,000/month for 20 years.
Min pension (Rs. 8,500) may apply if formula yields less.
Survivor: Widow receives 60% = Rs. 5,100/month (if min pension applies)
6. Impact on IT Industry
Common Mistake
IT companies think EOBI doesn't apply because employees earn above Rs. 25,000. It still applies to lower-paid staff (office boys, drivers, support staff).
Low Cost
Max Rs. 1,500/employee/month. For an IT company where most staff earn above the ceiling, EOBI cost is minimal — often under Rs. 10K/month total.
Employee Benefit
Provides real pension benefits for support staff — a meaningful benefit that costs the company very little given most IT staff are above the ceiling.
7. EOBI vs Provincial Social Security
| Feature | EOBI | SESSI | PESSI | ESSI |
|---|---|---|---|---|
| Jurisdiction | Federal (all Pakistan) | Sindh | Punjab | KP |
| Min Employees | 10+ | 5+ | 10+ | 10+ |
| Wage Ceiling | Rs. 25,000 | Rs. 45,000 | Rs. 45,000 | Rs. 30,000 |
| Employer Rate | 5% | 6% | 6% | 5% |
| Employee Rate | 1% | 0% | 0% | 0% |
| Primary Benefit | Pension | Medical | Medical | Medical |
| IT Relevance | Low (few qualifying staff) | High | High | Medium |
8. Compliance Checklist
- Determine if you have 10+ employees
- Identify employees earning ≤ Rs. 25,000/month
- Register establishment at nearest EOBI office or online
- Submit CNIC copies of qualifying employees
- Set up monthly contribution payment (15th of following month)
- Maintain contribution records
- File annual returns
- Report new hires / exits within 30 days
9. Recent Developments (2024-2026)
- Pension increase: Minimum monthly pension raised to Rs. 8,500 (from Rs. 7,000)
- Digital registration: Online registration portal being rolled out
- IT sector awareness: EOBI conducting outreach to IT companies in major tech hubs
- Wage ceiling review: Discussion ongoing to raise the Rs. 25,000 ceiling (not yet implemented)
10. Frequently Asked Questions
11. References
- EOBI Official Website
- Employees' Old-Age Benefits Institution Act, 1976
- EOBI Contributions Rules, 2014
- EOBI FAQs
- EOBI Policy Page →
- Sindh Provincial Page (SESSI overlap) →
- Punjab Provincial Page (PESSI overlap) →