Blogs
/
Hidden Gems

Hidden gems: Hiring remote workers in Pakistan

June 13, 2024

From bazaars and museums in Islamabad to K2 — the second tallest of the Seven Summits — it’s easy to see why Pakistan is a popular destination for travelers. But Pakistan offers much more than culture and beautiful scenery; it’s also becoming an increasingly popular choice for companies hiring remote employees.

Businesses and workers benefit from Pakistan’s many offerings, such as its education system, which produces a young, STEM-trained labor pool. The country’s investment in education and infrastructure is positioning Pakistan as a particularly cost-effective hub for hiring skilled global talent, including digital nomads attracted by the low cost of living.

Here, we’ll take a closer look at the benefits of hiring remote Pakistani employees.

Advantages of Hiring in Pakistan

With a robust infrastructure, a growing number of IT businesses, and expanding high-quality education programs, Pakistan’s reputation among remote workers and companies seeking top tech talent continues to grow.

Here’s a quick overview of some of the basics you need to know about Pakistan:

  • Languages: Urdu, English
  • Currency: Pakistani Rupee (PKR)
  • Capital City: Islamabad
  • Population: 235.8 Million
  • Cost of Living Rank: 146th

An Investment in the Future

Pakistan’s government is taking several concrete steps to entice foreign companies to hire Pakistani workers, including offering tax breaks and subsidies. There’s also a strong emphasis on providing training and new opportunities for the country’s young citizens, including accelerator programs and other tech-centric hubs to create a cohesive IT ecosystem.

A Global Leader in Freelancing

Pakistan is emerging as a top choice for companies seeking to employ freelancers, with a growing population of tech talent seeking remote work. This presents a significant opportunity for startups and other companies seeking skilled, scalable resources.

Hiring Compliantly in Pakistan

Though the labor cost remains low and offers numerous benefits for business hiring in Pakistan, the country’s employment regulations are based on no fewer than three dozen conventions. The regulations for hiring remote workers in Pakistan include:

Employment Contracts

Pakistani law includes six central employment contracts:

  • Permanent employees
  • Probationary employees (up to three months)
  • Alternate employees
  • Short-term employees (under nine months)
  • Apprentices
  • Contract employees (e.g., remote workers)

All contracts must detail job duties, work hours, benefits, termination terms, salary, and expectations for confidentiality. A written notice detailing the reason for termination is required to end a contract, with disputes adjudicated in court.

Working Hours & Pay

Employees in Pakistan may work no more than 48 hours within a six-day work week, and no longer than nine hours in one day without overtime pay.

Wages regulations include:

  • Minimum wage: Pakistan’s minimum wage is PKR 32,000 per month.
  • Overtime: Mandatory overtime pay of two to three times the regular rate.

Taxes

Tax rates in Pakistan vary widely depending on corporate residency and the company’s size. However, Pakistan’s permanent establishment regulations offer notably low rates for businesses recruiting remote workers.

Termination Process & Severance Pay

In Pakistan, employers can terminate employment contracts with written notice and a valid reason. Employees terminated without misconduct are entitled to severance pay typically equal to one month’s salary for each year of service with the employer.

The statutory notice period for termination is generally one month, though employers can offer payment in lieu of notice to shorten the waiting period.

Paid Leave Laws in Pakistan

Maternity and Paternity Leave

Expecting mothers in Pakistan receive 18 weeks of paid maternity leave, provided they have made healthcare contributions for the preceding six months. New fathers receive one month of leave for the births of their first three children.

Sick Leave

Employees are entitled to 24 days of sick leave per year. The first 16 days are paid at the employee’s standard pay rate, while the remaining eight days are compensated at 50 percent of their regular wages.

Annual Leave

After one year of employment, workers accrue 14 calendar days of paid annual leave, which must be taken in full each year. Additionally, employees may be eligible for Iddat leave, a special leave granted in specific circumstances.

Public Holidays

Pakistan observes 17 public holidays throughout the year, providing additional paid time off for employees.

Why Digital Nomads Love Pakistan

Though Pakistan doesn’t offer a digital nomad visa, it allows applicants from 108 countries to apply for various business-related visas through its E-Business Invitation Letter System.

Urban hubs like Islamabad, Lahore, and Karachi offer attractive home bases for digital nomads in Pakistan. The cost of living in each city is low, with the estimated monthly expenses for a single person ranging from $330 (Karachi) to $355 (Islamabad).

Infrastructure connecting the three cities is robust, and buses, railways, and air travel offer opportunities for weekend trips throughout the country to remarkable destinations from the Passu glacier and the Shandur Polo Festival in Gilgit-Baltistan to Multan (known as the City of Saints) and the Katas Raj Temples.

Hire in Pakistan with Remofirst

As an Employer of Record (EOR), Remofirst helps companies hire in more than 180 countries from around the world, including Pakistan.

Book a demo today to learn more about the services we provide, including handling administrative human resources tasks such as onboarding and payroll, and access to health insurance plans for global employees.