Guide · EOBI
EOBI: the small deduction that is not a tax
Many payslips show a small EOBI deduction of a few hundred rupees. Here is what it is, who pays it, and why it does not change your income tax by a single rupee.
What EOBI is
The Employees' Old-Age Benefits Institution (EOBI) runs Pakistan's main pension scheme for private-sector workers. If you work for a covered employer, both you and your employer contribute every month, and the contributions build your right to an old-age pension, and to invalidity and survivors' benefits.
Who pays what
| Contribution | Rate | At a minimum wage of Rs 37,000 |
|---|---|---|
| Employer share | 5% of the minimum wage | Rs 1,850 / month |
| Employee share (deducted from your pay) | 1% of the minimum wage | About Rs 370 / month |
The percentages are charged on the minimum wage, not on your actual salary — that is why the employee deduction is the same small amount for most workers. The figure above uses the federal minimum wage of Rs 37,000 (checked 4 November 2026). Provinces can set their own minimum wages, so the exact amount varies; your payslip shows the figure your employer uses.
EOBI is not a tax
- EOBI does not reduce your income tax. It is a pension contribution, not a deduction allowed in the salary tax calculation.
- It does reduce your take-home pay, by about Rs 370 a month at the federal minimum wage. That is why the salary calculator has an EOBI box under "Advanced": enter your payslip's EOBI amount and the take-home figure adjusts, while the tax stays exactly the same.
- Your employer's 5% share is paid on top of your salary — it should not come out of your pay.
General information only. Contribution rates and the applicable minimum wage should be confirmed against EOBI's current notifications or your payslip. Last checked 4 November 2026.