How to Hire Remote Employees In 


The Basics

Pakistan Rupee (PKR)
Employer Taxes
Payroll Frequency
Official Language

Employment in 


Hire Independent Contractors

Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.

For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.

For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.

As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.

While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.

Benefits of Hiring Independent Contractors
Time savings: Hiring through a subsidiary or EOR can take months of onerous paperwork and legal wrangling. This is only multiplied if you want to hire in multiple countries.
Reduced overhead: You can save tens of thousands of dollars in onboarding costs by hiring through a company like Panther. You also have fewer responsibilities to provide benefits, further reducing overhead.
Greater flexibility: Contractors can be brought on as-needed. If they are not a good fit, you can choose not to renew them without incurring significant additional termination costs.
Reduced legal risk: Contractors generally don't have the host of legal protections that typically cover full-time employees.
Disadvantages of Hiring Independent Contractors
Risk of Misclassification: While it's important to understand local contractor law, for most firms, misclassification risk is minimal.
Lack of Control: For a worker to be classified as a contractor, they should be allowed to work independently on their assigned tasks. Hiring full-time employees offers a wider range of management options.
Lack of Loyalty: Contractors come and go as-needed. Many companies hire contractors for short-term work, which makes it difficult to cultivate loyalty.

Set up a subsidiary in 


A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.

Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Pakistan can be expensive, stressful, and time-consuming. It's not for the faint of heart.

To set up a subsidiary in Pakistan, you have to:

  1. Register your business name and file articles of incorporation
  2. File for local bank accounts
  3. Learn and keep track of the local employment laws
  4. Set up local payroll
  5. Hire local accounting, legal, and HR people

If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Pakistan.

Use an Employer-of-Record (EOR)

An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.

An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.

Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.

At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.

Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:

  • Ability to attract talented and motivated employees from all over the world.
  • Full legal compliance: There is no risk of violating local employment laws.
  • Transparency: Employees are still your employees. All the work, processes, operations and day-to-day business belong to you, the company, just like with any other employee. Panther just takes on all of the responsibilities, obligations and admin work related to your team's employment.
  • No risk of misclassification

Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.

Paying Remote Employees

Paying employees in Pakistan is not the same as paying workers in your own country. Employees have to be paid using Pakistan's employment and payroll standards.

This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.

Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.

After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:

Pay through a local entity

One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.

Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.

Work with an EOR

Outside of EORs acting as the full admin employer, many also provide remote payroll.

For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.

We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.


 Specific Information

Working Hours

Normal working hours are a maximum of 9 hours a day and 48 hours a week. Anything over this is considered overtime.


If employees work more than stipulated 9 hours per day and 48 hours per week, they are entitled to overtime pay.

Overtime pay in Pakistan is 200% the employees’ regular pay. During holidays employees receive 300% the pay rate.

Payroll Tax



  • Healthcare
  • Pension

Minimum Wage

The minimum wage is 17,500 Pakistani Rupees per month.


Pay Cycle

Wages can be paid on a daily, weekly, bimonthly, or monthly basis. The wage period cannot exceed one month.

13th Salary

Not required.


Paid Time Off (PTO)

PTO is calculated by the:

  • Employees in Pakistan are entitled to 14 days of paid leave. They gain this right after they have completed 12 months of service.
  • Employees are paid their normal wages during leave. Factory workers receive half of their pay due before the beginning of the leave.  
  • Annual leave cannot be divided into parts and should be taken in its entirety. Unused leave is transferred to the following year. The maximum amount of transferable days is 14.  

Public Holidays

There are 10 public holidays.

Sick Days

The duration of sick leave entitlement provided to workers is dependent on how long they have been employed by their employer:

  • 10 days of casual leave upon contingent situations such as sudden illness or any other urgent purpose.
  • Employees receive 16 days on full pay and 8 days on half pay for the sick leave but should provide a medical certificate certified by a Doctor.
  • After the initial 16 days of sick leave, employers can offer employees sickness benefits for a period of 121 days at 75% of their last salary.
  • If employees are ill with tuberculosis or cancer, they are given a maximum of 365 days and receive their full wages. 
  • To receive benefits, the employee must have at least 90 days of contributions in the six months before sickness or injury. 

Maternity Leave

Female employees are eligible to take 3 months of paid maternity leave.

The six-week post-natal leave is obligatory. In order to receive maternity leave, the employee should be working for the same employer for at least 4 months before she gives birth.

No employer is permitted to terminate the female employee while she is on maternity leave.

In order to receive benefits, the employee must have at least 180 days of contributions in the year before the expected birth of the child.  

Paternity Leave

Fathers who are eligible will receive one-month leave for each of their first three children.

Parental Leave

No statutory law for parental leave.

Other Leave


Marriage Leave


Bereavement Leave

If a female employee’s husband dies, the employer must provide paid Iddat leave. This is a waiting period that the employee receives a normal wage.


Termination Process

A written letter should be provided when terminating a contract and reasoning for the termination must be sufficient.

Notice Period

The notice period in Pakistan is:

Both employee and employer should provide a months’ time notice.

Advanced notice is not required for temporary workers. If advance notice is not provided, a monthly salary in its lieu shall be provided.

Severance Pay

When employees are discharged from work, they are given severance pay.

The pay amounts to 30 days’ wages for each completed year of service. Employees do not receive severance pay if they are dismissed for misconduct.

Probation Period

The probationary period typically lasts 3 months.