How To Comply With Social Security Obligations After Company Registration In Pakistan?

Company Registration In Pakistan, it must comply with various labor laws and social security regulations to protect the rights of its employees. Social security obligations ensure that workers receive benefits such as medical coverage, pension, and injury compensation. Compliance with these regulations is mandatory for businesses under the Employees’ Old-Age Benefits Institution (EOBI) Act and the Provincial Employees Social Security Ordinances.

This article outlines the key social security obligations that businesses must fulfill after company registration in Pakistan.

1. Registering with the Employees’ Old-Age Benefits Institution (EOBI)

What is EOBI?

The Employees’ Old-Age Benefits Institution (EOBI) is a federal body that provides pensions and retirement benefits to employees in registered companies.

Steps to Register with EOBI

  1. Obtain EOBI Registration

    • After company registration with SECP (Securities and Exchange Commission of Pakistan) or as a sole proprietorship, the company must register with EOBI.
    • Submit the Employer Registration Form (ERF-01) along with the company’s business registration certificate and National Tax Number (NTN).

  2. Register Employees

    • All employees earning up to PKR 25,000 per month must be registered under EOBI.
    • Submit the Employee Registration Form (INS-01) along with CNIC copies and appointment letters.

  3. Contribute to the EOBI Fund

    • The employer contributes 5% of the employee’s salary, while the employee contributes 1%.
    • Monthly payments must be deposited through designated banks.

  4. Submit Monthly and Annual Reports

    • The company must file monthly returns with EOBI, listing all employees and their contributions.
    • Annual updates about new hires, resignations, and salary changes are required.

Non-compliance with EOBI regulations can result in penalties or legal action.

2. Registering with Provincial Social Security Institutions

Each province in Pakistan has a Social Security Institution that provides medical and disability benefits to workers.

Company Registration In Pakistan

Key Social Security Institutions

  • Sindh Employees’ Social Security Institution (SESSI)
  • Punjab Employees’ Social Security Institution (PESSI)
  • Khyber Pakhtunkhwa Employees’ Social Security Institution (KPKESSI)
  • Balochistan Employees’ Social Security Institution (BESSI)

Steps to Register with Social Security Institutions

  1. Employer Registration

    • Submit a Company Registration In Lahore Application to the relevant provincial social security office.
    • Provide documents such as the business registration certificate, NTN, and employee records.

  2. Employee Registration

    • All employees earning up to PKR 25,000 per month must be registered.
    • Provide employee details, including CNIC copies, appointment letters, and salary slips.

  3. Contribution Payments

    • The employer contributes 6% of the employee’s salary to the social security fund.
    • Payments must be made monthly through designated banks.

  4. Submission of Returns and Compliance Reports

    • Monthly social security returns must be submitted.
    • The company must maintain accurate records of contributions and employee benefits.

Failure to comply with provincial social security regulations can result in penalties, fines, or legal action.

3. Compliance with Workers’ Welfare Fund (WWF) and Workers’ Participation Fund (WPPF)

The Workers’ Welfare Fund (WWF) and Workers’ Participation Fund (WPPF) are labor welfare programs managed by the government.

Workers’ Welfare Fund (WWF) Requirements

  • Companies earning a profit of PKR 500,000 or more per year must contribute 2% of their annual profit to WWF.
  • Contributions help fund housing, education, and medical facilities for workers.

Workers’ Participation Fund (WPPF) Requirements

  • Companies with a profit exceeding PKR 2 million must contribute 5% of their net profits to WPPF.
  • Funds are distributed among employees to improve their financial well-being.

Failure to contribute to WWF or WPPF can lead to legal action and financial penalties.

4. Ensuring Compliance with Minimum Wage and Labor Laws

Minimum Wage Compliance

  • Companies must pay employees at least the minimum wage set by the federal and provincial governments.
  • The current minimum wage varies by province (e.g., PKR 32,000 per month in Punjab and Sindh, PKR 34,000 in Khyber Pakhtunkhwa).

Other Labor Law Requirements

  • Provide employment contracts outlining wages, benefits, and working conditions.
  • Maintain records of attendance, salary payments, and tax deductions.
  • Adhere to the Factories Act, of 1934, which regulates working hours, safety, and overtime payments.

Non-compliance can lead to labor disputes, legal penalties, and reputational damage.

5. Filing Annual Compliance Reports with SECP

After registering a company, compliance with SECP’s corporate governance regulations is necessary.

Key Annual Filings

  • Annual Returns: Update SECP about company structure, directors, and financials.
  • Tax Filings: Submit employee tax deductions and social security contributions to FBR.
  • Employee Benefits Report: Provide an annual report on EOBI, social security, and labor law compliance.
Company Registration In Pakistan

Maintaining proper records and submitting reports on time prevents legal action and business disruptions.

Conclusion

Complying with social security obligations after company registration in Pakistan with the help of Hamza & Hamza Law Associates is essential to ensure employee welfare and legal compliance. Businesses must register with EOBI, and provincial social security institutions, and contribute to WWF and WPPF. Additionally, they must comply with minimum wage laws, maintain employee records, and file compliance reports with SECP and tax authorities.

By fulfilling these obligations, businesses build trust with employees, avoid legal penalties, and contribute to Pakistan’s economic development.

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